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Pressure on the złoty is rising. The euro exchange rate, EUR/PLN, is stable around 4,32 zł.
The złoty remains under pressure from rising energy prices, but EUR/PLN is still hovering around 4,32 zł
There is still a clear sense of caution on the foreign exchange market today. The euro exchange rate stood at 4,3247 zł in the morning, which meant that 1000 zł bought about 231 euros. That is close to Thursday’s reference level and still within the 4,29-4,35 zł range that has held for two months.
For people exchanging money, the key point is that EUR/PLN itself does not offer especially cheap or especially expensive euros today. The difference from the previous day was small, and a day earlier the common currency had risen by nearly 1,5 grosze. When exchanging 5000 zł, such a move translates into a few złoty, not a major change to the budget.
Pressure on the złoty is increasing because of the situation in the Middle East and higher energy prices. The escalation of tensions and new risks to shipping in the Red Sea and the Strait of Hormuz are fueling worries about oil supplies, with prices nearing USD 110 per barrel. That, in turn, is reinforcing inflation expectations.
Higher inflation means investors may be able to assume a cautious approach to interest rates in Poland for longer. Analysts at PKO BP note that signals from A. Glapiński about the long-term stabilization of NBP rates were supportive for the PLN, but they did not have a strong impact on current quotes. The reaction to the ECB‘s 25 bp rate hike was similarly limited.
What is helping, however, is the lack of a clear strengthening of the dollar against the euro. EUR/USD remains slightly above 1,16 USD, which limits pressure in the Polish market. The dollar was quoted at 3,7263 zł in the morning, the Swiss franc at 4,5790 zł, and the British pound at 5,0364 zł. So the picture is more one of stabilization than of a sharp shift in sentiment.
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