Today’s weakening of the American currency can be mainly attributed to the sell-out tendency of the USD. The sell-out is mainly caused by the expectation of another interest rate cut in the United States. The possibility of an interest rate decrease by the FOMC was speed up by yesterday’s very bad macroeconomic publications from the US housing market where both, housing starts and building permits, declined to the lowest level in over 14 years. The Beige Book, published later on, confirmed the difficult situation of the American economy.

Investors are not in good mood. To make it worse, unemployment claims increased to 337K against the forecasted 312K. At the same time, Bank of America published its quarterly report, much worse than analysts’ expectations. The current situation will be discussed on the G7 meeting, where finance ministers and central bank chairmen will meet.

The Polish Złoty is still staying strong and keeps gaining against the greenback and the euro. The EURPLN declined to 3.6950 breaking the important 3.7 barrier. The global weakening of the dollar is also reflected in the quotation of the USDPLN, which is currently being quoted at 2.5860.

Adam Narczewski