__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.
Many negative events across the pond - weekend reports from the Federal Reserve Chairman, Treasury Department's assurance of sufficient banking sector liquidity and partial closure of government institutions. The zloty remains stable during the Holiday trade.
The most important macro data (CET - Central European Time). Surveys of macro data are based on information from Bloomberg unless noted otherwise.
USA generate problems
Friday's session on the US markets ended with a strong decrease. Bloomberg calculated that S&P 500 fell by more than 17% in the current quarter, which was the worst quarterly result since the last three months of 2008. Then the core index of the New York Stock Exchange fell by 22%.
However, during the weekend, other pessimistic signals began to come in. Bloomberg and other media started to report that President Donald Trump was about to dismiss Jerome Powell, Federal Reserve's Chairman. Donald Trump has often expressed his dissatisfaction with the Fed's monetary policy, but it seemed to be more a political strategy than a desire to influence the independence of the Federal Reserve. President Trump has often boasted that during his term the shares increase, and when they fall, too restrictive monetary policy can be blamed. However, the willingness to dismiss the President and the attempt to actually block increases in interest rates is more of a systemic threat than a political struggle.
During the weekend, Steven Mnuchin, head of the US Treasury department, clearly denied media reports of Powell's dismissal. Alongside the positive news, negative news was also received, as Mnuchin held talks on Sunday with six heads of major commercial banks in the United States and obtained assurances from them about sufficient liquidity in the sector and the maintenance of credit for companies or households.
Generally, there have been no indications that the problems occurred with banks. However, the market is now beginning to wonder whether it is simply a too violent reaction to the recent falls in the market and an attempt to calm the situation, or whether the administration suspects much bigger problems in the financial system which is why Sunday's extraordinary conversation with representatives of commercial banks was held. Apart from the events related to the Fed, we are also dealing with the partial shutdown of government institutions. These are the result of a lack of agreement in the Congress on next year's budget. Currently, this problem seems relatively trivial and is the result of cross-party disputes over the financing of the construction of the wall on the border with Mexico.
How do investors react to all these reports? It is possible that in the case of the next series of drops on the US markets, we can see a strengthening of the dollar. Also, the rapid rebound should also be positive for the USD. Intermediate scenarios are negative signals for the dollar.
Limited changes
The zloty deteriorated slightly on Friday when the pessimism on the US markets was getting worse. Today, the zloty has pared a significant part of Friday's losses in relation to the dollar. On the other hand, the EUR/PLN pair remains stable in the range of 4.28-4.29. It seems that until the end of the session not much should change, especially as trading on the US markets ends at 7 p.m. CET.
It seems that the first days after holidays should not be particularly difficult for the zloty. The stabilisation of the zloty's quotations remains the baseline scenario and only very serious external turbulence could change this situation.
Subscribe to our currency newsletter
See also:
Zloty ends the week in good shape (Afternoon analysis 21.12.2018)
Weak data from France (Daily analysis 21.12.2018)
The dollar remains weak (Afternoon analysis 20.12.2018)
Fed plans two increases in 2019 (Daily analysis 20.12.2018)
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