The dollar is the weakest against the euro since the 2nd of February. The pound is near its daily maximum. The zloty remains in a positive position, but its appreciation potential seems limited.
Today, the EUR/USD reached the level of 1.081. Even though the dollar has been relatively weaker, such a significant increase was caused by the relatively stronger euro. In addition, the dollar’s index was pushed to the level of 99.6 points.
At 13.30, we received some information that the current account deficit for the fourth quarter was better than expected, which was positive for the dollar (112.4 billion dollars vs 16 billion dollars). The current level of this index is the lowest since the second quarter of 2015.
The pound sustained the majority of its gains, generated by the positive CPI data. In his commentary regarding this data, the Bank of England’s chair, Mark Carney, said that the bank’s reaction shouldn’t be too intense. He also added that the BoE looks more widely at particular readings.
Zloty remains strong
Positive sentiment towards the emerging market currencies has been causing the zloty’s strength. Both the franc and the dollar, have reached their lowest level against the zloty since November. The EUR/PLN has reached its lowest level since August. However, we need to keep in mind that the zloty’s strong position has been generated by external factors.
The recent dovish signal from the Monetary Policy Council, as well as worse economic data for February, should have had a negative impact on the zloty. Nevertheless, the zloty has been supported by the dollar’s worse condition. The zloty may lose intensively, if this trend is altered.
At 10.00, Eurostat will publish the data regarding the eurozone’s current account for January. The last time this index was at a negative level was at the beginning of 2012. Since then, it has been increasing gradually to reach the level of 36.4 billion euros. However, this index decreased to the level of 36.4 billion euros in December and the market consensus for January also estimates a decline (to 29.3 billion euros). However, taking into consideration hawkish signals that the European Central Bank has been sending recently, as well as a stronger condition of the euro, a better than expected reading may strengthen the euro.
At 15.30, the Energy Information Administration will present its weekly report regarding the American oil market. Oil prices decreased significantly in less than two weeks in comparison to their level from after the agreement between the OPEC countries. This is significant, because global inflation growth is driven by oil prices. Their further decline would limit inflation pressure. Moreover, this may reduce expectations regarding rate hikes by some central banks (including the American Federal Reserve). Therefore, the market will most likely focus on the American oil supply tomorrow. Its increase would deny the previous actions from OPEC and cause supply pressure on the oil prices.