The British currency clearly appreciates. This afternoon the pound cost 1.30 USD, the highest level since February 7th. The Polish currency, in turn, was in a weaker condition and in relation to the pound depreciated to the lowest level in the last 1.5 years.
Crucial days ahead of the zloty
The zloty was slightly weaker today, despite the better than expected data on wages (growth by 7.5% versus 6.9% year-on-year) in the corporate sector in Poland. The changes were relatively limited, but the Polish currency lost in relation to most of the basic currencies, as well as to the forint. Recent zloty quotations show that the zloty is more likely to lose value than to increase.
The EUR/PLN exchange rate ranged between 4.33-4.34 and the USD/PLN between 4.82 and 4.85. As the start of the New York trading session approached, the dollar gradually depreciated. The EUR/USD increased from today's lows at around 1,1280 to 1,1330. The lack of a deeper appreciation of the dollar also enabled the pound to reach its highest value in nearly two weeks, and the GBP/USD exchange rate rose to 1.30 moment after 4:00 p.m.
The combination of a globally stronger pound and a weaker zloty led to situation where the GBP/PLN quotations reached approx. 4.977, i.e. the upper limit of the quotations of the last year and a half. There is still a lack of an agreement on Brexit, but the market is increasingly valuing the limited chances of a hard Brexit.
Recently, a good sentiment on the equity market has been observed, which results in significant increases in the main market indexes. A lower level of risk aversion also supports the pound. Its significant fluctuations are likely to continue in the coming days and weeks.
At 10:00 a.m. the Polish Central Statistical Office (GUS) will publish data on industrial production in Poland in January. The median of market expectations indicates annual growth of 3.7% compared to 2.8% a month earlier. Production, similarly to Thursday's publication on retail sales, may have a significant impact on the zloty's quotations. An increase in production below 2.8% would mean the slowest pace in 11 months and would strengthen the argument about the economic slowdown. The downward pressure on the zloty may increase in such a scenario, especially if the weaker than expected production reading coincided with equally weak retail sales data published the following day.