The zloty when viewed in EUR / USD, inflation will be the key

The calm EUR / USD saves the zloty, which practically does not react to the strong wave of risk aversion in the global markets, which can be observed in recent days. 

The situation in PLN is exceptionally stable

Tuesday brings a slight strengthening of the zloty against the main currencies, which in practice means the continuation of the process initiated already on Monday. At 09:47 the euro went down by 1,1 grosz to PLN 4,6805, the dollar by PLN 1,7 to PLN 4,4260, and the Swiss franc by 1,2 grosz to PLN 4,4610. The latter currency is the cheapest since the end of February this year. 

The wave of sudden sell-off that has been pouring over the global stock markets since Thursday, combined with the increased volatility of other assets and the general increase in risk aversion in the global markets, does not have a significant impact on the performance of the Polish currency. 

Zloty is saved by peace EUR / USD. This pair has been in consolidation above $ 1,05 for over a week, with only minor price turbulences at the US last week's meeting Federal Reserve (Fed). The same, which is currently behind the observed increase in risk aversion in other markets.

Daily chart EUR / USD. Source: Tickmill

Wednesday's data may turn out to be crucial

The behavior of the EUR / USD remains the key factor for the zloty performance in the short term. The higher the rate of this pair, the better the chances for a stronger zloty. And vice versa. This means that the situation in the currency market will probably be decided on Wednesday, when the US consumer inflation data will be released. In April, for the first time in many months, inflation is expected to fall to 8,1%. year on year from 8,5 percent in March. A larger than expected decline would overestimate the dollar, while improving market sentiment and strengthening the zloty. Significantly worse data will have the opposite effect.  

Later in the week, the shaping of Polish currency pairs will also be influenced by the changing attitude to risk in the global markets, where, probably after the last wave of escape from risky assets, moods will slightly improve (if they are not deteriorated by US inflation data). And this should support the zloty. 

Domestic factors may include whether the Sejm, after a few months of postponing and seeking the Sejm majority, at the meeting on May 11-12, will finally elect Adam Glapiński for the second term of the president National Bank of Poland. However, such an impact will probably not be exerted by the data on the balance of payments and inflation in Poland, released on Friday.