The euro exchange rate is moving away from PLN 4.60 despite some nervousness in the global markets. USD / PLN returned to near 3.90. The franc costs over PLN 4.25, and the pound around PLN 5.45.
The franc’s quotations are above the level of PLN 4.25
The euro exchange rate was stable in the past days. However, EUR / PLN is flirting again from 4.56, which is a barrier that should be permanently breached by opening the door to the Polish currency to make up for the summer losses. We reiterate the opinion that the rate set local highs in July and should drift to lower levels over time. We forecast that we will pay about PLN 4.50 for the common currency at the end of the quarter.
While the euro exchange rate is not subject to strong fluctuations, the dollar has significantly increased in terms of the dollar. The US currency is recovering from the weakening at the end of last week. EUR / USD moved back from 1.18 to 1.17. This pushed the USD / PLN to 3.90. However, we do not see any space to continue this trend. An atmosphere of uncertainty prevails in world markets: concerns about the outlook for the global economy and the epidemic situation are constantly recurring. Of course, the intentions of the central banks, especially the Federal Reserve, are also under scrutiny. In such an environment, the safest strategy seems to be to delay and wait until the doubts are cleared. Investors were lost in the news from the antipodes. First, a single case of the coronavirus prompted the New Zealand government to go into a three-day nationwide quarantine (weekly in Auckland). Later, the central bank abandoned the announced increase in interest rates due to epidemic threats (exacerbated by low vaccination rates). This week, the New Zealand dollar was losing as much as 2.5 percent. and tonight it was the cheapest compared to its American counterpart since fall. These events not only plunged the currency that is referred to in the market jargon as the kiwi (from flightless bird), but also sowed the seeds of doubt that the same could be true in other cases as well.
Data from the US does not dispel doubts
Retail sales in the US starts the quarter with a decline that is stronger than forecast. Its month-to-month dynamics reached the value of minus 1.1 percent. What is more, the data fell short of the index net of expenses on cars, fuels, restaurants and building materials. This state of affairs, however, can be attributed to the fact that the deferred demand for goods has been largely met and that consumers spend more on services. The apogee of the consumption boom, which increased by almost 12% in the previous quarter, is probably behind us. This is also due to the gradual phasing out of extraordinary, crisis social transfers and the fact that the pandemic collapse of GDP has been made up for.
Industrial production, especially in the production of goods, has performed very well despite persistent disturbances in global supply chains. On the one hand, the sector is more resistant to the worsening of the epidemic than services. On the other hand, companies will be catching up with the delays that have accumulated in previous months for a long time. The data from the US economy do not paint a clear picture of its condition recently. Let’s summarize: employment is growing the fastest in a year; inflation is high, but price rises have lost their momentum; consumer sentiment has experienced one of the strongest slumps in recent years; retail sales hold back · industry (as well as the rest of the world) is doing well. This combination means that although the fate of the asset purchase program is practically a doomed (we expect the announcement of such a decision at the September Fed meeting at the earliest), the monetary authorities will cool down expectations of imminent interest rate hikes for a long time. As a result, the potential for dollar appreciation is running out. The US currency should be close to its maximum strength, but we assume that it will lose value in the coming months.
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