Not being able to brake this important level, the Eurodollar began its correction movement and finish the week at $1.4590, despite worse news from the American economy – GDP in the 2nd quarter grew only by 2.8% (against the 3.4% forecast).

Local investors were waiting for Wednesday, when the polish Monetary Policy Council (MPC) decided to keep interest rates in Poland unchanged at 6.00%. The decision itself was no surprise to analysts who expected such move. The Polish economy is clearly slowing down, which is pictured by slower wage increase and retail sales. Members of the MPC were clearly “dovish” when discussing the next steps in the monetary policy. Inflation still remains riskily high in Poland (almost twice the target established by the Polish Central Bank) but the economic slowdown should lower it. No so long ago investors expected an interest rate hike by 25 basis point but recent news put a big question mark besides that statement. Those news, along with the strengthening dollar caused the Złoty do decrease. The EUR/PLN grew from zł.3.2755 all the way to zł.3.3640 throughout the course of the week while the USD/PLN climbed from zł.2.2240 to zł.2.3055.   

Adam Narczewski