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The euro rate is rising to near 4.25 zł. The market is waiting for the NBP governor’s remarks
Euro close to 4,25 zł after the MPC decision. The market is waiting for Adam Glapiński’s comments
The euro exchange rate moved near 4,24 zł in the morning and was testing the 4,25 zł level. On Wednesday morning, euro was trading at 4,2416 zł, or 0,4 grosz more than on Tuesday evening. For people exchanging money, that is still a small move, but it shows that the złoty has not managed to use the MPC’s decision to strengthen in a lasting way.
The Monetary Policy Council kept interest rates at their lowest levels in 4 years, in line with market expectations. The decision itself did not surprise investors, so the reaction in EUR/PLN was limited. Quotes are still hovering near the lower boundary of the spring channel, around 4,2250 zł.
Inflation is now in focus. The May CPI (Consumer Price Index) reading came in below market fears. That reduces pressure for a quick rate hike. PKO BP economists believe inflation may remain within the NBP’s acceptable tolerance band until the end of the year.
A press conference by NBP President Adam Glapiński is scheduled for 15:00. The market will be looking for answers to whether the hawkish tone, meaning a greater willingness to raise rates, will hold after the weaker CPI reading. Analysts assume that, if there are no major changes in the geopolitical backdrop, EUR/PLN may stay in the 4,2350-4,2450 zł range, while USD/PLN may remain around 3,63-3,65 zł.
The dollar is showing a slight strengthening. The EUR/USD pair fell to around 1,1620, while USD/PLN rose to 3,6504 zł. That is 0,8 grosz more than on Tuesday evening. The Swiss franc cost 4,6281 zł, almost exactly the same as a day earlier, while the British pound climbed to 4,9136 zł and was the most expensive in a week.
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