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19.10.2009 - Weekly Currency Report: Złoty strikes back

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Date: 2009-10-19 13:40

The season for company’s quarterly publications has started the U.S and is driving the markets. Reported results are better than the market expected (so far Alcoa, JP Morgan Chase, Goldman Sachs, Bank of America or Citigroup) but investors are not reacting enthusiastically as expected. Nevertheless, the EUR/USD is on its quest to new highs. This past week, the major currency pair reached its yearly high at $1.4966 while at the beginning of the week being quoted at $1.47. If capital markets will not suddenly collapse, new yearly highs for the EUR/USD are possible this coming week.


The Polish currency followed the trend on the EURUSD and bounced back from last week’s decline. Decreasing risk aversion caused inflow of foreign capital, which caused the Złoty to appreciate. At the same time the European Bank of Reconstruction and Development increased to 1.8% its forecast for Polish GDP in the year 2010. As reported on Friday, employment in Poland declined by 2.4% (as forecasted) while wages increased by 3.3% (more than the 2.8% forecast). It seems that the Polish economy is slowly bouncing back from the crisis and some inflationary publications (vide increased wages) are a good sign for the Złoty. Throughout the course of the week the EUR/PLN declined from zł.4.2815 all the way to zł.4.2135 (weekly low zł.4.18) while the USD/PLN tumbled from zł.29095 to zł.2.8330 (weekly low at zł.2.79).


Adam Narczewski