The złoty remains under pressure. The euro at 4.30 PLN remains in play

Friday morning brought further weakening of the złoty. Despite quite moderate message from the NBP president, the euro rate is pulling towards the line PLN 4.30, which is the upper limit of the spring consolidation.

On Friday at 9:50 the euro rate rose by half a grosz, reaching the level 4.2850 PLN. This could be the sixth session in a row when the Polish currency is losing against the euro. Since the beginning of June, the EUR/PLN exchange rate has already increased by more than 5 pennies.

It is therefore more and more likely that in the near future time course EUR/PLN will attack the line of 4.30 PLN. It marks the upper limit of the spring sideways trend and in terms of technical analysis it is a clear resistance. A possible break of this level would imply an increase in the euro exchange rate to around PLN 4.40. That is, a value not recorded since November 2023.

- Postponing the rate cuts may still delay We expect the zloty to weaken towards 4.30 - they wrote in the morning report by Bank Millennium economists.

During an exceptionally short press conference on Thursday, the president NBP Adam Glapiński did not take a clear position on further interest rate cuts . He made the July cut dependent on the results of the new inflation projection and the government's decision on electricity prices for households. At the June meeting The Monetary Policy Council did not lower interest rates as expected following a sharp 50-point reduction in May.

There were opinions among economists that the Council may not be in a hurry with further reductions , which would be in the medium term a factor contributing to the strengthening of the złoty in relation to the euro. Let us recall that in the eurozone the monetary policy easing cycle is in full swing and that in Thursday the ECB once again cut interest rates by 25 basis points .

We are still waiting for the results on the most important pair currency exchange rate of the world. On Thursday, the EUR/USD exchange rate was close to attacking the level of 1.15, which would pave the way for 4-year highs in April. Historical weakening dollar correlated with the strengthening of the zloty against the euro. But since March this the correlation disappeared. On Friday morning the dollar on the Polish market cost 3.7431 PLN and was 0.7 groszy more expensive than the day before. USD/PLN exchange rate It is still moving in a sideways trend and only a permanent decline below the 3.70 line PLN would change the situation here.

Swiss franc rose by over a penny, reaching a price of PLN 4.5682. Also in the case of a pair franc-zloty has been in a sideways trend since April, with a range of PLN 4.50-4.60. However, the following stocks were close to breaking out of this year's consolidation quotes for the pound-zloty pair. In the morning, the British currency cost 5.0785 PLN, and the day before the course the pound approached the line of 5.10 PLN. That is, the upper limit applicable sideways trend since January.

KK

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