Chances for the dollar to become cheaper in the nearest future are very small. It is better to postpone shopping in foreign online stores for Spring. You can also browse the offers in the countries, whose currencies wore off to the zloty – comments Piotr Lonczak, Cinkciarz.pl currency analyst.
Recently, the zloty has not been very fortunate. In October and November it was on top ranks of Bloomberg's list of the most overvalued currencies to the dollar. In the latter month only the Colombian peso appeared to have a worse result than the zloty. As a result, the dollar crossed the symbolic level of 4 PLN. This is its highest price for eleven years. Thus, shopping in the American online stores is not that attractive anylonger.
Not only zloty loses value
The most important factor responsible for an increase in rate of the dollar, are the expectations regarding tightening of the American monetary policy. In October the American central bank announced that interest rates are very likely to grow on the December's meeting. This will be the first hike since 2006. An increase in interest rates, leads to an increase in currency rate.
A wider look at the currencies from the central-east European region (CEE) suggest that the scale of the PLN overvalue was only slightly higher than in the cases of the forint and the krona. Between October and November, the Polish currency depreciated to the dollar by more than 6%. At the same time the Czech krona lost more than 5%, and the Hungarian forint 4.7%.
The zloty was to a certain degree affected by the national factors. Period of the strong dollar overlapped with the change of the government, and initiation of discussion regarding the new personnel of the Monetary Policy Council. This also had a disadvantageous impact on the Polish currency. In the case of the Emerging Markets, which include Poland and other CEE region countries, such events increase the likelihood of a wear off on the national currency.
On the other hand, if we look at behaviour of rates of the zloty, forint and krona in the past three years, we will see an overvalue of these currencies to the dollar, respectively by 23, 25 and 26%. This also shows that the zloty enforced itself by 3% to the krona, and by 2% to the forint. Moreover, the zloty gained a lot to the Russian rouble, Turkish lira, and Ukrainian hryvnia.
Cheap shopping in Czech Republic and Hungary
The course overtaken by the Federal Reserve means that the dollar may be expensive for a long time. It can be even a few years. The base of the dollar will be dependant not only from the development of the American economy, but also the situation in the eurozone, and the European Central Bank's policy. For the moment being it is difficult to point out the arguments which could increase the chance for a decrease in the dollar's rate.
A chance for an enforcement of the PLN may appear at the beginning of next year. However, it does not have to be a change in trend. Temporary fluctuations resulting from a character of the currency market seem more likely. In Spring, the zloty very often becomes increasingly expensive to the dollar and other currencies. Thus, we can assume that after an increase to the highest level for eleven years, the dollar will begin to depreciate not sooner than at the beginning of second quarter of 2016.
Such situation causes that shopping in the American online stores is not too profitable at the moment. The goods became more expensive by approximately one third, in comparison to the past three years. That is why instead of waiting for a better rate of the dollar, you can search for shopping offers in the countries, whose currencies wore off to the zloty. Shopping in Ukraine, Russia or Turkey, may appear very cheap. The Czech and Hungarian online stores may offer us even better prices, and also the shopping is safer. Buying in the European Union countries involves a definitely smaller risk.