“EURPLN Rate Falls to Lowest Values Since June 2021: Forex Market Outlook and Analysis”

Last week rate EURPLN increased to 4.5408 (weakening of the zloty by 0.5%). In the first part of the week rate EURPLN fell below 4.50, reaching the lowest value since June 2021. This was a continuation of the trends reflected in previous months. In the second part of the week there was a correction and an increase in the EURPLN rate. Similar changes were observed in the case of EURHUF exchange rate. In our opinion, this resulted from taking profits by some investors.

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On the other hand rate EURUSD it remained in a downward trend throughout the last week, which was supported by investors’ expectations that the Fed has not yet finished the cycle of interest rate hikes. A positive factor for the dollar exchange rate was the release of lower than expected data on unemployment benefits in the US. Numerous other last week’s releases of data from the US and the euro zone had no significant impact on rate EURUSD.

This week will be crucial for the exchange rate of the Polish currency today’s release of national industrial production datawhich may contribute to the strengthening of the zloty. In turn, the FOMC Minutes release scheduled for Wednesday may be conducive to increased volatility of the zloty exchange rate. Other releases from the Polish and global economy scheduled for this week will not have a significant impact on the zloty exchange rate.

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FOMC Minutes release in the spotlight

2 years old last week IRS rates increased to 6.34 (increase by 19 bp), 5-year to 5.48 (increase by 24 bp), and 10-year to 5.45 (increase by 24 bp). Throughout last week we were dealing with an increase in IRS rates along the entire length of the curve following the core markets. The increase in bond yields in the core markets was supported by increased expectations of some investors for further interest rate hikes by major central banks.

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We believe that today’s release of domestic industrial production data may support an increase in IRS rates. At the same time, the focus of investors’ attention will be the release of Minutes from the May FOMC meeting scheduled for Wednesday, which may be conducive to increased volatility of IRS rates. The other releases from the Polish and global economy scheduled for this week will not have a significant impact on the curve in our opinion.

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