__cfduid
Valid: 29 days
It helps us protect the website from threats such as hacker attacks. Used by Cloudflare to recognise trusted network traffic.
__lc_cid
Valid: 3 years
Necessary for proper functioning of the chat available on the website.
__lc_cst
Valid: 3 years
Necessary for proper functioning of the chat available on the website.
rc::a
Valid: It does not expire
Cookies to correctly distinguish between human and bot-generated traffic.
rc::b
Valid: 1 session
Cookies to correctly distinguish between human and bot-generated traffic.
rc::c
Valid: 1 session
Cookies to correctly distinguish between human and bot-generated traffic.
NID
Valid: 6 months
Records a unique number to recognise the device you are using. It is used for advertising.
_ga
Valid: 2 years
Registers a unique user number to collect statistical data about how you use our website.
_gat
Valid: 1 day
Used by Google Analytics to reduce queries. Reduces the amount of statistical data collected.
_gid
Valid: 1 day
Registers a unique user number to collect statistical data about how you use our website.
yt-player-bandwidth
Valid: It does not expire
Determines the best video quality based on your device and the Internet connection used.
yt-player-headers-readable
Valid: It does not expire
Determines the best video quality based on your device and the Internet connection used.
A calm start to the week in the currency market – the main currency pairs remain fairly stable. Positive data from the Polish economy regarding the average earnings growth only had limited impact on the zloty.
Low volatility
The week started relatively calmly. Today, the negotiations regarding Brexit started – David Davis, the UK’s Brexit secretary, met with Michel Barnier, EU’s chief negotiator. However, the process could prove much more difficult for the UK than initially anticipated, especially after Theresa May, the British prime minister, and her Conservative Party lost the majority in the parliament in the recent election.
This significantly weakened her negotiation position, while the elections meant to improve it. However, what was not so positive for May, could be good the British currency. Her weaker negotiating position could mean a lower probability for a “hard Brexit”. Such a scenario was probably adopted by most investors – the pound gained against both the euro and the dollar around 1% during the last week.
The range of trading today in the case of the main currencies was rather limited. The EUR/USD was oscillating around the 1.12 level, GBP/USD was close to 1.28 and USD/JPY was just above the 111 boundary. As a result, the dollar’s index (DXY) showed low volatility and traded just below 97 pts, close to 8-month lows (96,3 pts). There are no significantly important events planned for the current week, unlike the previous one (e.g. central banks’ decisions, inflation reports), so general volatility in the currency market this week could also be lower.
High average wage growth rate
The Central Statistical Office (GUS) said today in a press release that the average earnings in the corporate sector increased by 5.4% year-over-year, while the market consensus pointed to a 4.9% growth rate. This was also the biggest increase since January 2012. In the same report, GUS also published data regarding employment in that sector which grew by 4.5% YOY, 0.1 percentage points below expectations, although the increases in the last five months were fairly stable between 4.5% - 4.6%.
The aforementioned data, however, had very little impact on the zloty – it gained in value only marginally against the major currencies directly after publication. EUR/PLN was still close to 4.21 and USD/PLN around 3.76. Tomorrow’s data regarding industrial production and retail sales in May could have a relatively higher impact on the Polish currency’s value.
Tomorrow’s preview
On Tuesday at 2 p.m., the Central Statistical Office (GUS) will share the data regarding industrial production and retail sales in May. Both readings didn’t meet expectations in April – especially in the case of industrial production - it decreased by 0.6% year-over-year, while a 2.4% YOY growth rate was expected (it was also the first decline since October). Retail sales, on the other hand, recorded only a modest decrease in growth rate from 9.7% YOY to 8.1% YOY, while an increase of 8.9% YOY was the market consensus.
The median of market expectations suggests that the industrial production growth should pick up in May to 8.6% YOY while retail sales to 9.1% YOY. Investors will probably focus on those two readings as another set of weak data (especially industrial production) could point towards a lower than expected GDP growth rate in the second quarter, which could weaken the Polish currency.
Although the zloty’s volatility around the time of publication will probably be higher, the final impact on exchange rates against major currencies could also be a relatively limited one. The zloty has been reacting to a much greater extent to external factors rather than internal in recent months. If the positive sentiment on the European markets is maintained and the aforementioned data will not deviate much from the consensus, tomorrow’s GUS publications could ultimately be relatively neutral for the Polish currency.
Subscribe to our currency newsletter
See also:
Daily analysis 19.06.2017
Afternoon analysis 16.06.2017
Daily analysis 16.06.2017
Afternoon analysis 14.06.2017
Attractive exchange rates of 28 currencies
Live rates.
Update: 30s
Open your free account today
Save your time and money. Create an account for free and discover how much you can gain. Join us today, and start using attractive currency services.
Create free account