The dollar is rising, while the euro rate is stable as oil prices stay below 110 USD

Euro and dollar near this year’s highs, złoty under pressure

In the morning, euro was trading at 4,3741 zł, meaning the exchange rate was almost half a grosz higher than on Monday. In practice, that means that when exchanging 1000 zł, you can buy about 228,6 euro today. For people traveling abroad or converting savings into another currency, this is still close to this year’s high.

As recently as last Thursday, the euro rate reached 4,40 zł, the highest level in 2,5 years. Since then, quotations have stayed within the 4,37-4,3850 zł range. This shows that the market remains near the upper end of this year’s range, although without a new move above the recent peak.

Analysts at PKO BP say that if there is no further escalation in the Middle East and Brent crude stays below 110 USD/b, there are no new triggers likely to cause another major move in EUR/PLN and USD/PLN. In that scenario, they expect the euro rate to stabilize in the 4,36-4,38 range.

They see USD/PLN similarly, pointing to a 3,8150-3,86 range. For people earning in dollars, that means that when exchanging 5000 zł, valuation differences can already be noticeable, although the moves are still not the kind of sharp day-to-day changes seen in jumpy markets.

Pressure on the złoty is also being increased by the U.S. dollar, which is gaining as expectations rise for further rate hikes by the Fed (the U.S. Federal Reserve). As a result, EUR/USD fell to 1,1350 and dropped to its lowest level in three months. On the Polish market, the dollar cost 3,8531 zł in the morning, or one grosz more than a day earlier, and was close to this year’s high of 3,8620 zł.

In the morning, the Swiss franc was trading at 4,6236 zł, while the British pound cost 5,1019 zł. In both cases, the changes versus Monday were small, but they show that the złoty remains weaker against these currencies as well.

Sources

1. Current exchange rates: Narodowy Bank Polski (average exchange rate table)