Higher than expected inflation from Germany does not help the euro. The main currency pair is depreciating even though data from the US economy is not surprising. The zloty remains insensitive to external factors.
According to our previous analysis, September's inflation in Germany clearly exceeded economists' expectations (2.3% y/y vs. 2.0% y/y). However, its growth was mainly stimulated by the increase in energy prices (by 7.7% y/y) and food prices (by 2.8% y/y). In the case of services, prices accelerated marginally (from 1.4% to 1.5% y/y) and the rental prices, which represent a significant share in the inflationary basket (20%), fell from +1.6% to +1.5% y/y. This means that the pressure from core inflation remained moderate and this should not have a significant impact on the growth of this component also in the eurozone's price readings.
Moreover, data from the USA was published. It does not include key indexes, but in general, they may contribute to a slowdown rather than an increase in GDP in Q3.
The trade deficit for August increased to 75 billion USD (70 billion was expected), and orders for durable goods, excluding means of transport, increased by 0.1% in the previous month, with an estimate of 0.4%. In theory, the data should not support the dollar. However, it cannot be ruled out that investors are starting to think somewhat perversely, and weak data is starting to be interpreted as favourable to the US currency due to the growing risk of a worsening sentiment and the return of capital from abroad to the US.
It is also possible that the euro is affected by the unresolved issue of the Italian budget. In the evening a meeting of the Italian government is scheduled to take place and the representatives of the coalition will probably decide whether it is worth sacrificing the position of Finance Minister for a higher deficit. If this happens, the EUR/USD could fall by several dozen pips.
External fluctuations, similar to the previous days, translate into impulses for the zloty. The euro remains close to the 4.28 PLN. The dollar is appreciating slightly (levels close to 3.66 PLN), but also changes in the US currency versus the Polish counterpart are relatively small. It seems that only very serious external disturbances may significantly disturb the zloty's exchange rate. Therefore, by the end of the week, strong movements on the zloty's pairs are unlikely to be expected.