Afternoon analysis 22.09.2017

The EUR/USD returns below the 1.20 boundary. A series of comments from the ECB without the influence on the euro. Williams from the Fed on a target interest rate level and December's decision. The zloty remains relatively strong, the EUR/PLN still close to the 4.27 level. The franc close to the levels before Black Thursday.

Today, three speeches by members of the ECB were published. However, they did not have a noticeable impact on the single currency area valuation. Mario Draghi drew attention to the challenges of the labour market for young people, and Benoit Coeure pointed out issues related to the link between the local currency exchange rate and the euro in countries wishing to join the monetary union.

Vitor Constancio's speech could have been theoretically positive in the context of the euro, in which there was a mention of less than it was in the historical dependences of the strengthening currency on inflation. However, similar conclusions were already presented recently and the impact of these suggestions was also unclear.

In turn, the first Federal Reserve representative who spoke on the monetary policy after Wednesday's FOMC meeting was John Williams. The President of the regional department of the Fed in San Francisco stated during his visit to Switzerland that the "normal new" level of interest rates for the United States was 2.5%. This is a little less than the macroeconomic projections of the Fed, but Williams added that this year we can have one more increase.

From the more interesting information that appeared in the afternoon is Janet Yellen's speech scheduled for September 26th. It is intended to cover inflation and the monetary policy. Although the President of the Fed is unlikely to surprise the market on the coming Tuesday, traditionally, there is a likelihood that investors will react to "headlines" and larger movements during such events.

Stabilisation in the zloty

The national currency maintains the levels gained in recent hours. The EUR/PLN pair even tried to breach below the 4.2700 boundary. Although this move has not succeeded yet, it can be seen that the zloty after yesterday's comments by Eugeniusz Gatnar for Reuters on a possible interest rate hike is definitely in better condition than at the beginning of Thursday's session.

The low global valuation of the franc and the relatively good form of the zloty mean that the CHF/PLN is 1 gr from the lowest levels since the second half of January 2015. There is also only 15 gr left for the Swiss currency in relation to the Polish one to be valued at Black Thursday level when the EUR/CHF rate was released by SNB and caused an extreme increase in the value of the Helvetia currency. Given current market trends and the fundamental situation of Switzerland and the eurozone, it is likely that this level can be reached soon.