Daily analysis 21.08.2017

This week, the limited calendar of economic events has been influencing the currency market's calm start. The euro has incurred some losses before Friday's conference in Jackson Hole, but those losses have been relatively small. The zloty has been stable and the small fluctuation range has been likely to remain in the coming days.

The most important macro data (CET - Central European Time). Surveys of the macro data are based on information from Bloomberg unless noted otherwise.

• No macro data that can clearly influence the analysed currency pairs.

The yen gained as the euro incurred losses

Monday's limited economic calendar meant that the start of new week's trading was a continuation of Friday's moods. The level of risk aversion, however, has not been as great as in the last day of the past week. Today, the main indexes of European exchanges have been at negative levels, although the scale of drops has not been similar to those of the previous trading day.

Today, the Japanese currency, perceived as one of the "safe havens," has noticeably gained in value. The USD/JPY exchange rate oscillated to approx. 109, near to the lowest level since mid-April. In turn, the dollar remained generally stable today - the dollar index (DXY) stayed practically unchanged compared to Friday's closing and moved to a relatively narrow range of 93.3 - 93.5 points.

Despite the relatively small changes (up to approx. 0.2%), the euro has incurred losses in relation to some main currencies. The EUR/USD pair has fallen to approx. 1.173, with around 1.176 at Friday's closing. On one hand, it may be a further recovery from recent rapid increases in the euro's value.

On the other hand, it may mean that investors' have been positioning ahead of Mario Draghi's (the president of the European Central Bank) speech on Friday during the conference in Jackson Hole (Wyoming, USA). While significant changes in the ECB's monetary policy have not been expected, some investors may be afraid of Draghi's speech in the context of recently published ECB Governing Council minutes.

The minutes have pointed out the possible overshooting of the euro rate. While the exchange rate does not belong to the ECB's mandate, this type of wording may put further downward pressure on the euro. Especially due to the fact that some investors may be afraid of Draghi's reference to the exchange rate.

The zloty kept gains

Around midday, the trading of the zloty against the main currencies has been at the recorded level at last week's end.

The level of variability has also been relatively small. The EUR/PLN pair has been quoted in the range of 4.27 - 4.28 and the USD/PLN pair has been at about 3.64. Similarly, the CHF/PLN and the GBP/PLN exchange rates have remained at stable levels. The aforementioned exchange rates have been within last week's fluctuation range and the probabilities of significant changes until Friday seem to be limited.

The macroeconomic publication calendar from both Poland and abroad, has been relatively limited. Therefore, the fluctuations in the currency market have been reduced. These, however, may occur when the conference in Jackson Hole begins on Thursday.

The key speeches by main bank's officials was only scheduled on Friday: the Federal Reserve (USA) and the European Central Bank (eurozone). Although it is not expected to point to changes in current monetary policy, the reports and headlines coming from information agencies could generate more volatility on the market, which would then increase the exchange rate fluctuations.