As recently as just few weeks ago it was believed that the zloty could only strengthen. The members of MPC who even talked about strong domestic currency with concern believed that, too. Then what caused the EUR/PLN to break through the 4.20 level and USD/PLN reach the half-a-year highs instead of moving towards 4.00 per Euro? It is a quite easy and popular explanation that the domestic currency's weakness in recent hours is caused by aggravation of the conflict between Russia and the West. The media abroad are reporting about the gathering of Russian military forces near the border with Ukraine and raising concerns about Moscow wanting to officially enter the neighbor’s territory. This makes investors trying not to as much evaluate the risk of spreading of the conflict to other territories (such development is still unlikely), but the deeper Kremlin isolation and its consequences to European economies.
Marcin Lipka, Cinkciarz.pl analyst