The złoty is strengthening despite rising oil prices and a stronger dollar, with EUR/PLN falling below 4,25 zł

The zloty starts the week stronger, despite expensive oil and a stronger dollar

The start of the week brought a gain for the zloty, although the market backdrop was not favorable. Crude oil remains elevated, and USD/PLN is still holding near higher levels. Even so, the euro rate fell below 4,25 zł, which means people exchanging money in Poland can buy the currency a little cheaper than before.

On Tuesday at 10:00, the euro was 0,3 grosz cheaper and cost 4,2402 zł. The U.S. dollar was more than half a grosz more expensive in the morning and was quoted at 3,6446 zł. The Swiss franc cost 4,6407 zł, while the British pound stood at 4,8833 zł, or half a grosz less than on Monday evening.

PKO BP analysts said in the morning that the market may be positioning for a scenario in which U.S.-Iran talks resume and part of the geopolitical risk premium fades. In that case, the PLN could edge higher, with EUR/PLN moving below 4,24 and USD/PLN heading toward 3,62.

Since the start of the war with Iran, and the official ceasefire that remains in place to this day, the euro rate has been trading in a broad 4,2250-4,3070 zł range. Over the past month, quotations have been closer to the lower end of that range, but attempts to break below it in April and May have failed.

On the franc-zloty pair, a similar local consolidation has held, with fluctuations between 4,60-4,65 zł. Movements on the pound-zloty pair have also been limited, so for people repaying loans or converting incoming payments, the changes remain small for now.

Sources

1. Current exchange rates: National Bank of Poland (average exchange rates table)