January 2014 summary:
January has ended with zloty's weakening. In the beginning of the year our currency was losing in relation to euro, as well as the dollar. the zloty lost almost 14 groschen to dollar. When it comes to euro, this dynamic was slightly smaller and the loss amounted 10 groschen. Polish currency decreased mainly because of the weak situation on global markets. There was no help from good macro data of our economy. Let us remind that since the beginning of January, the Monetary Policy Council (MPC) had not made any changes in interest rates heights.
The comment after this decision, was also taken as positive. The Council estimated, that current height of interest rates is adequate to present situation, and it will not be varied until the end of first half-year of 2014. The gradual improvement of business cycle by very low inflation pressure, is expected in upcoming months. In reply on the comments about increasing the period of low interest rates, president of Monetary Policy Council, Marek Belka, stated that the look on March inflation projection will be necessary. January's publication of CPI inflation on level of 0,7% r/r had shown, that it is still far from MPC's goal, which is 2,5%. By keeping this tendency and pressure of economists and experts, Monetary Policy Council's members might consider increasing the period of low rates, by following quarters of 2014. Zloty also could not expect any help from the grim moods on emerging markets, which were caused by few factors. Big anxieties of the investors, come from the fear of further economical growth in China and Argentina's insolvency. These phenomena are not temporary. Last increases of interest rates of such emerging countries as Republic of South Africa or Turkey, can be a confirmation of this lasting tendency. These increases did not brought a permanent effect though, but only one day lasting enforcement of local currencies. Aversion to risk in the areas of emerging markets seems to be getting stronger. Situation on the global markets proved, that our currency is strongly co-related with the moods of western investors. The main culprit were USA and gradual extinguishing of quantitive easing program, became a fact. The decisions of keeping the current interest rates on levels 0 – 0,25% and decrease of assets purchasing scale to the level of 65 billion USD per month, were made last Wednesday (29.01.) on FOMC conference. It was second limiting month in a row, because similar activities occurred in December. This decision was explained to be a result of improving situation on American labour market and low inflation pressure. Also Wednesday's conference was the last one with Ben Bernanke as a chairman. He will be replaced by Janet Yellend, who previously was Fed's vice-president. Despite that the official information about limiting the purchase of American government bonds and mortgage-backed-securities was announced last Wednesday, capital's (mainly American) outlet from emerging markets (including Poland) became apparent in the beginning of this year.
EUR/USD is in the decrease trend on daily chart, since the beginning of this year. On January 17th the technical sales signal was generated. The pair took off downwards from Ichimoku cloud on level of 1,3563. The signal was confirmed by other elements of alterator. Chikou span (the grey line) was placed below the price, while tenkan sen (the purple line), was placed below kijun sen (the yellow line). After taking off downward and few days of consolidation, the pair begun gaining on its value. It did not managed to break through resistance of kijun sen on the level of 1,3699 (the yellow line). On January 30th another downward taking off from Ichimoku cloud on level 1,3563 took place. It was confirmed by the other elements of Ichimoku, which additionally confirms the decrease trend. Closest support is the minimum from November 7th on level of 1,3274. Closest resistance is 1,3563 level.
USD/PLN is in the increase trend on the daily chart. On January 29th the technical signal of purchase was generated. The pair took off upwards from Ichimoku cloud on level of 3,0832. The signal was confirmed by other elements of alterator. Chikou span (the grey line) is placed above the pirce, while tenkan sen (the purple line) is above kijun sen (the yellow line). The signal can indicate on the short term tendency though, because of the fact, that Ichimoku cloud is thin in the place of cutting through, which decided about the weak resistance. Closest support is tenkan sen (the purple line) on level of 3,1025. Closest resistance is today's maximum on level of 3,1584.
EUR/PLN is in the increase trend on daily chart. On January 24th the technical signal of purchase was generated. The pair took off upwards from Ichimoku cloud on level of 4,1854. The signal was confirmed by other elements of alterator. Chikou span (the grey line) is placed above the price, while tenkan sen (the purple line) is above kijun sen (the yellow line). Just as in case of USD/PLN, the signal can be short termed, because of thin cloud in place of taking off. Closest support is tenkan sen (the purple line) on level of 4,2092. Closest resistance is maximum from Friday, on level of 4,2604.
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This commentary is not a recommendation within the meaning of Regulation of the Minister of Finance of 19 October 2005. It has been prepared for information purposes only and should not serve as a basis for making any investment decisions. Neither the author nor the publisher can be held liable for investment decisions made on the basis of information contained in this commentary. Copying or duplicating this report without the written permission from Cinkciarz.pl Sp. z o.o is prohibited.
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