Afternoon analysis 23.02.2017

Jobless claims index from the USA was slightly disappointing. However, it remains near its historical minimum. The MPC minutes were consisted with the consensus and had a limited impact on the zloty.

Jobless claims from USA

According to the report from the American Labor Department, jobless claims index was at the level of 244k, which was by 3k more then expected. However, last week’s result has been revised from 239k to 238k. Moreover, due to the recently positive readings, the four-week moving average decreased to the level of 241k, which is its lowest level since July 21st, 1973.

This data had a limited impact on the dollar, which has remained under the impact of yesterday’s minutes from the FOMC. The American currency remains in a worse condition. Moreover, the dollar may be under pressure of the statement from the American Secretary of Treasure, Steve Mnuchin. He said that the policy of President Donald Trump will have a limited impact on the economy in 2017.

The EUR/USD has been increasing to the level of approximately 1.058. Moreover, the USD/JPY was pushed below 113. The GBP/USD increased above 1.25. All of this has caused the dollar’s index to decrease to the level of 101 points.

Minutes from MPC

The zloty wore-off slightly. The EUR/PLN went near 4.31, whereas it was below the level of 4.30 this morning. The situations was similar in the case of the franc, the pound and the forint. However, the zloty worked-off a portion of its losses against the dollar. This caused the USD/PLN to be pushed from 4.09 to approximately 4.07.

Today, the National Bank of Poland published the minutes from the previous meeting of the Monetary Policy Council. The Council members took note that the future GDP growth would accelerate. This would be supported by increasing investment dynamics, as well as a further increase in the use of the EU funds.

The Council also indicated that internal inflation pressure remains limited and baseline inflation is still at a low level. The MPC emphasized that the risk of exceeding inflation goal remains minor in the mid-term. The message from the minutes was consistent with the market consensus (there was no announcement of rate hikes for 2017.) Therefore, its impact on the zloty was limited.

Tomorrow’s events

At 16.00, we will know the American consumer sentiment from the University of Michigan for February. This will be the second reading of this index. In January, its result was at the level of 98.5 points, which was its twelve-year maximum. This was mainly caused by the election of the new American president and hopes regarding lower taxes, as well as an increase in infrastructural expenses. However, this index’s initial reading for February indicated an unexpected decrease to 95.7 points. Currently, the market consensus is at the level of 96 points. Taking into consideration the lack of significant data tomorrow, this reading may increase fluctuations on the dollar.