Data from the USA are not as surprising as those from Europe (Afternoon analysis 23.06.2020)

The dollar depreciates. PMI data from the US have slightly disappointed expectations, while analogous publications from the eurozone exceeded the consensus. The EUR/USD exchange rate breaks 1.13 boundary, rising to its highest level in a week.

Market sentiment acts against the dollar

In the afternoon, the trend of weakening the dollar continued. The positive sentiment still prevailing in the market definitely reduced the demand for the US currency, while it strengthened the demand for the euro. Although we have been observing positive sentiment for several weeks now, today it was additionally supported by the PMI indexes of the industry and services sector for the eurozone, published this morning, which were much higher than expectations.

The difference in the valuation of the euro to the dollar rose even more when the US PMI data became available. The activity indexes of the US industrial and services sector in June were not as surprisingly good as for the eurozone.

In the USA, a significant increase was noted in relation to May levels. However, readings below 50 points continued to indicate a recession in both sectors, with the PMI industry at 49.6 points being 0.4 points below expectations and PMI services at 46.7 points and 1.3 points below expectations.

In the case of the US economy, market participants attach more importance to the data on activities in these sectors produced by ISM (not yet published). The publication of the IHS Markit, on the other hand, has strengthened the already growing supply pressure on the dollar, bringing the main currency pair, i.e. EUR/USD, to about 1.1350, which is the highest level in a week and about 0.65% above yesterday's closing.

The zloty slightly supported

The weakening dollar continues to reduce pressure on emerging countries' currencies, including the zloty. Although the USD/PLN quotations fell at some point even to about 3.9140 (the lowest in a week), the basket of the zloty did not benefit too much from favourable external conditions (weakness of the dollar, positive sentiment on the broader market).

An hour and a half after the opening of trading on the New York Stock Exchange, the EUR/PLN exchange rate was just under 4.45, i.e. near yesterday's closing level (similarly to the quotations of the franc or the pound against the zloty). Today, no more significant fluctuations are to be expected (no major events planned), while tomorrow morning the ZEW institute will publish data on the economists' confidence index for the German economy. If they turn out to be as optimistic as the PMI indexes, the supply pressure on the dollar can be maintained.