The euro rate is rising to 4.36 zł. Expensive oil is weakening the złoty

Oil is getting more expensive, and the euro is rebounding from recent lows

EUR/PLN was at 4,3647 zł in the morning, so 1000 zł buys about 229 euro today. That is only slightly higher than on Wednesday evening, by 0,8 grosz. On an amount of 5000 zł, the difference from the previous close is therefore small, but it becomes noticeable on larger transfers.

The zloty remains under selling pressure, and according to analysts one of the reasons is higher crude oil prices. For Poland, which imports energy commodities, more expensive oil usually means greater pressure on prices in the economy. That, in turn, may limit room for a more lasting strengthening of the zloty.

The day before, the domestic currency gained on improved investor sentiment, and EUR/PLN fell by more than 1 grosz to its lowest level in a month. Now part of that move is being erased. PKO BP analysts believe that by the end of the week there should be no expectation of a lasting move below 4,35 in EURPLN or below 3,86 in USDPLN.

Weaker-than-expected retail sales data in Poland are also gaining importance. September’s increase in purchases came in below economists’ forecasts. Combined with average industrial output and a sharp slowdown in real wage growth, this reduces the chances of interest-rate hikes at the NBP (Narodowy Bank Polski).

In the dollar market, USD/PLN was at 3,8858 zł in the morning, 0,7 grosz higher than a day earlier. The pound cost 5,2073 zł, and the Swiss franc 4,73 zł. In both cases, this shows that the zloty remains weaker against other major currencies as well, although the scale of the morning moves is not large.

Sources

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