Stock markets began the week strongly which positively affetced the increasing eurodollar and weakening Japanese Yen against most currencies. That is a natural reaction of the market to decreasing risk aversion.
On Tuesday, the Euro discontinued gaining and finished close to Monday’s close. The british pound also experienced low volatility despite higher than expected CPI publication (0.5% against the forecasted 0.3%). No reaction to inflationary reports are not surprising since investors focus on more important news. On the other hand, the Polish Złoty strongly appreciated. The local currency gained not only because of decreasing risk aversion but mainly due to higher CPI inflation (4.5% against the forecasted 4.4%). Higher than expected industrial production drop (-2.8% against the forecasted -0.8% drop) in the U.S caused the American currency to weaken on Thursday. The end of the week brought more bad news from the American economy. Building Permits fell by -8.3% (forecast at -1.0%) while Building Starts by -6.3% (forecast at -1.7%).
Due to the current, uncertain, situation on financial markets, high volatility on the Złoty market is very common. The eurodolar is much more stable but the American currency keeps gaining and at the end of the week was quoted at $1.3445. The EUR/PLN and the USD/PLN, after big swings throughout the week, finished where they started at zł.3.5514 and at zł.2.6430 respectively.
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