Tuesday’s TIC Net Long-Term Transactions report showed an outflow of $69.3B from the US capital markets. On Wednesday, the government announced that housing starts declined to 1.19M and building permits to 1.22M, the lowest levels in 14 years. The news lifted the EUR/USD to a new record at $1.4317 on Friday morning.

Macroeconomic publications certainly helped the Polish Złoty. The Polish Current Account declined to -637M euros (against the forecasted -1,139M) while CPI increased to 2.3% (expected 1.9%) on a yearly basis. Increasing inflationary pressures might push the Polish Monetary Policy Council to raise interest rates on their next meeting. Those expectations caused the Złoty to keep gaining value against major currencies. The EUR/PLN declined from zł.3.7240 all the way to zł.3.6743 (the lowest in 5 years) while the USD/PLN gained even more, from zł.2.6290 to zł.2.5719 (the lowest in 11 years). Borrowers having their debt denominated in the Swiss franc are still cheering for a strong Złoty. The CHF/PLN reached a new all-time high at zł.2.1920.

Adam Narczewski