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19.06.2009 - Currency Weekly Brief

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Date: 2009-06-19 15:54

After the Zlotys plunge two weeks ago, the Polish currency  grew in strength against both the US Dollar and the Euro during the week. This occurred even with the weakening of global stock markets, thus increasing aversion to risk. I believe that if the corrective movement on stock markets continues then the Zloty may continue to also weaken in the short term. The EURUSD will have to be also observed as the increase on the EURUSD could aid the strengthening of the Polish currency. 


As to the EURUSD market then it encountered a see saw week, starting with the decisive strengthening of the US Dollar and ending with the strengthening of the Euro. All in all it has to be said that the previous week did not change much from the technical point of view.  What is interesting though, is that Russia did have an impact on both the strengthening and the weakening of the US currency. On Monday Russia’s finance minister voiced his support of the US Dollar, stating that it was too early to think of an alternative reserve currency, whilst on Tuesday Russian president Dmitry Medvedev said that the world would actually need a new reserve currency, in order to stabilize global finances. Even better than expected data from the US real estate market did not help the Dollar return to its increase movement initiated at the beginning of the week. Currently the EURUSD may continue its decrease and the nearest support level stands at 1.3748. If this level is broken then the minimum target should be 1.3615. The increase scenario is only possible if the level of 1.4176 is broken. This would open up the way to 1.4436.

Omar Arnaout