The EURUSD has reached a years minimum of 1.3440 which is obviously the effect of the House accepting Paulson’s recovery plan. Though corrective movements could be observed during the week, I believe that investors could witness a come back to the level of 1.3450 shortly.
A key moment during the week has to be the coordinated action of central banks where the FED, ECB, BoE and the BoC all lowered their reference rate by 50 basis points. Doing so the FED shifted its base rate to the level of 1.5%. This decision could be interpreted as a path to providing investors with calm and aiming at minimizing the ever growing risk adversity. Unfortunately this decision has still not had a meaningful effect as stock markets continued to tumble together with the sell out of emerging market currencies.
This affected the Polish Zloty, which experienced one of the worst weeks in its history losing around 5% in value against the US Dollar and the Euro. Currently the USDPLN market stands at the level of 2.6200, whilst the EURPLN market stands at the level of 3.5500.
The next week will produce information with regard to inflation in the US, EU and Polish economy, but the major factor behind any dynamic market movement will still be left in the hand of market emotions.
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