The zloty weaker, waiting for the Fed will limit volatility in the second half of the day 

The decline in the EUR / USD exchange rate and worse sentiment in the global markets translate into a weakening of the zloty. In the second half of the day, however, waiting for the results of the Fed meeting in the evening will stabilize its performance. What Powell will say after the meeting will depend on his Thursday fate.

The first half of the day in the domestic currency market was marked by zloty weakening. In the second half of the day, waiting for the evening results of the American meeting Federal Reserve (Fed) and Powell's press conference after the meeting, ie the main events of the day in the financial markets, should have a stabilizing effect on the trading. The results of the meeting will depend on whether the domestic currency appreciates or depreciates on Thursday.

Situation on the zloty market

The zloty started Wednesday with a weakening. He was burdened by worse moods in the financial markets (especially in Europe), withdrawal of the EUR / USD exchange rate and the slight pressure on the zloty weakening that had been building up for several days. On the other hand, the data from the domestic labor market published by the Central Statistical Office remained unaffected. In December, according to economists' forecasts, the unemployment rate in Poland increased to 6,2 percent. from 6,1% a month earlier.

At 12:51 AM the EUR / PLN exchange rate was at PLN 4,55 against PLN 4,5443 on Tuesday at the end of the day. The USD / PLN exchange rate, which yesterday unsuccessfully attacked the level of PLN 3,7558, today rose by PLN 1,9 and again attacked yesterday's highs, following the fall of EUR / USD by 0,37%. to $ 1,2117. On the other hand, the Swiss franc increased by PLN 1,4 to PLN 4,2270. 

All three currency pairs remained within the range of fluctuations from the last days. And everything indicates that the next few hours will not bring significant changes in the zloty. Its fluctuations, as in the case of many other currencies, in the second half of Wednesday's trade will be stabilized by waiting for the evening results of the Federal Reserve meeting. It is the most important event of the day in the markets today. 

The decision on interest rates and the statement after the Fed meeting will be released at 20:00 CET. The market does not expect changes in US interest rates, but also changes in the rhetoric of the monetary authorities. Hence, all attention will be focused on the post-meeting press conference by Fed chairman Jerome Powell scheduled for 20:30. Everything indicates that Powell will be cautious about the prospects of the US economy fighting the pandemic, the coronavirus, emphasizing the need for its long-term support by monetary policy. This, in turn, should lead to a weakening of the dollar, which in turn will translate into a stronger zloty. 

EUR / PLN daily chart. Source: Tickmill

The situation on the daily charts of Polish pairs indicates that in the short term there is a growing pressure to weaken the zloty. In the medium and long term, its strengthening remains the baseline scenario. In the case of EUR / PLN, for which a more active supply can be expected to exceed PLN 4,57, the first target is PLN 4,50. The next area was PLN 4,4130-4,4160.