Quiet Monday on the zloty. Calm before the storm?

The lack of free investors from the US limited the volatility in the currency market on Monday. EUR / USD exchange rate, which was changing dynamically after Friday's data from the US labor market, stuck in a narrow range of 1,1852-1,1880. The lowest in almost a month. The market was not even started by the series of PMI indices that were published in the morning, describing the economic situation in the European services sector.

The chances of an interest rate hike are growing

Limited fluctuations of EUR / USD also limited volatility on the zloty. At 16:22 PM the EUR / PLN rate tested the level of PLN 4,5072, ie it was 0,1 groszy lower than on Friday at the closing. The USD / PLN exchange rate rose by the same symbolic 0,1 groszy and the dollar had to be paid 3,8005 zlotys.

It certainly had an impact on lower volatility in the zloty awaiting the results of the Monetary Policy Council meetingthat investors will know on Thursday, not Wednesday. But at the same time, the interview with President Adam Glapiński for Financial Times. Significant interview, because it can read the following slow change in the attitude of the president NBP to monetary policy. This is indicated by the fragment in which he did not rule out an interest rate hike at the end of the year. 

Ignoring the words of the NBP governor is probably temporary. It will be back at the end of the week. First, the MPC will debate on interest rateswhich, of course, will not change, but the publication of new macroeconomic forecasts will surely provide a lot of excitement.  

Another important event for the zloty will be the monthly press conference of the NBP president scheduled for Friday, July 9 at 15:00. In fact, answers to the questions sent earlier, because these cannot be asked live. And then the interview will come back for Financial Times, completing the whole.

The current situation on the zloty remains quite ambiguous. Both drops and increases are possible in the short term. There is no doubt, however, that in the medium term, amidst rapid economic growth, increased inflation and the slow global entry of central banks into the period of monetary policy tightening, clearly supports the strengthening of the Polish currency.