__cfduid
Valid: 29 days
It helps us protect the website from threats such as hacker attacks. Used by Cloudflare to recognise trusted network traffic.
__lc_cid
Valid: 3 years
Necessary for proper functioning of the chat available on the website.
__lc_cst
Valid: 3 years
Necessary for proper functioning of the chat available on the website.
rc::a
Valid: It does not expire
Cookies to correctly distinguish between human and bot-generated traffic.
rc::b
Valid: 1 session
Cookies to correctly distinguish between human and bot-generated traffic.
rc::c
Valid: 1 session
Cookies to correctly distinguish between human and bot-generated traffic.
NID
Valid: 6 months
Records a unique number to recognise the device you are using. It is used for advertising.
_ga
Valid: 2 years
Registers a unique user number to collect statistical data about how you use our website.
_gat
Valid: 1 day
Used by Google Analytics to reduce queries. Reduces the amount of statistical data collected.
_gid
Valid: 1 day
Registers a unique user number to collect statistical data about how you use our website.
yt-player-bandwidth
Valid: It does not expire
Determines the best video quality based on your device and the Internet connection used.
yt-player-headers-readable
Valid: It does not expire
Determines the best video quality based on your device and the Internet connection used.
China's plans for Hong Kong escalate the already existing serious tension in relations with the US. Market sentiment is worsening, the dollar is consequently appreciating, but these are still limited changes: about 0.5% in relation to the euro or the zloty.
The dollar may return to the upward path again
For the last two or three weeks, almost every day there have been reports of deepening conflict between the USA and China. The US administration's accusations against China on coronavirus are another element of uncertainty beyond the issue of international trade. It has also become clear that a firm stance towards China will be part of Donald Trump's presidential campaign (elections in November), which may indicate a potential deterioration in market sentiment in the coming months.
Although this is not directly related to the US, China today announced plans to impose a new national security law in Hong Kong. The timing was probably not accidental when the whole world (and Hong Kong too) is struggling with the coronavirus and its impact on the economy. However, this move escalates the conflict with the US (some members of Congress have already criticised this move) and shows that the geopolitical risks to the market have increased significantly and the impact of the pandemic may not be the only problem later in the year.
China's plans for Hong Kong have already clearly worsened sentiment in the broader market. Like last year, when geopolitical tensions were increasing, demand for the dollar has increased today. This was not a drastic change, but the main currency pair, i.e. the EUR/USD, fell by 0.5% around the midday, breaking the 1.09 limit slightly. As a result of the dollar's appreciation on the global market, the USD/PLN exchange rate also increased, while yesterday the USD rate fell even to the level of 4.1070, today it has already returned over 4.15.
Increased geopolitical tensions may increase the volatility of the zloty or the euro. Apart from USD/PLN, changes in the value of the zloty still remain within a limited range. The EUR/PLN exchange rate fluctuates around 4.51-4.53 and CHF/PLN around 4.24-4.27. Looking ahead, the zloty should increase within a year or so, but depending on how the tension between the US and China develops, the zloty may also depreciate in relation to current levels.
Disastrous data on sales
Today, the Polish Central Statistical Office (GUS) published data on retail sales in April in Poland. As expected, they were dreadful and even slightly deeper than the economists' consensus. The 22.6% annual decline was 3.6 percentage points higher than expected, but the impact of these data was marginal on the market. The same decline was also published in April by the British Office for National Statistics in the morning. However, the market is now focused on the effects of lifting restrictions and the data, even if disastrous and illustrating the scale of the recession, have very limited effect on the currency market.
Subscribe to our currency newsletter
See also:
More than 25 million unemployed in the USA (Afternoon analysis 21.05.2020)
Increased tension between the US and China (Daily analysis 21.05.2020)
Dollar remains under pressure (Daily analysis 20.05.2020)
Economic confidence in Germany recorded a sharp jump (Afternoon analysis 19.05.2020)
Attractive exchange rates of 28 currencies
Live rates.
Update: 30s
Open your free account today
Save your time and money. Create an account for free and discover how much you can gain. Join us today, and start using attractive currency services.
Create free account