The strengthening of the U.S dollar followed declining stock markets, which also needed a breather after weeks of constant increases. At this moment it does not look like anything else but just a corrective movement. Macroeconomic news were not as bad as it could have seemed, only Wednesday’s reports from the U.S housing markets negatively surprised investors. Better than expected news from the Polish economy did not help the Złoty. Wages in Poland increased only by 2% (yearly basis) but the employment decline slowed down. Industrial production in October declined only by 1.2% while the markets expected a reading of -2.7%. The local currency did not react neither to pro-inflationary reports like higher than forecasts PPI inflation (2%) and core inflation (2.9% against the expected 2.8%). During the week, the EUR/PLN advanced from zł.4.0930 all the way to zł.4.1460 while the USD/PLN from zł.2.7325 to zł.2.7935. The EUR/PLN was not able to break the zł.4.1560 while the USD/PLN the zł.2.8105 resistance levels.
Next week the Polish Monetary Policy Council will decide on interest but any change from the current 3.5% level would be a big surprise.
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