Waiting for this evening with the Federal Reserve (Daily analysis 29.07.2020)

On Wednesday morning, the financial market was relatively calm. This is the result of investors' anticipation towards evening events: the publication of statement after the two-day Federal Reserve meeting and a press conference with its chair, Jerome Powell.

The situation in the US leaves no room for a surprising statement

The market is waiting for mild statements, and the difficult situation of the US economy does not give much ground to American central bankers. Therefore, significant changes in monetary policy are not expected.

However, during those events, we can expect an increase in currency market volatility, particularly in the dollar. Fundamental changes are unlikely, and such changes are likely to remain valid for the next month.

97 days - that is all that has left until the US elections. As the date of November 3rd, 2020 approaches, tensions in the geopolitical sphere may intensify, gaining slightly more importance for the market. This will happen over time with a potential next wave of coronavirus outbreaks, which may also slightly modify the expectations of market participants and their perception of risk.

Zloty goes up and slightly down

Meanwhile, the lack of significant changes in the market in the following days also means a potentially limited range of fluctuations for the zloty. The basket of the Polish currency is in a slightly weaker condition today. However, this is due to the reaction of the strong growths of the past week.

Today, the EUR/PLN quotations increased above 4.42 PLN, i.e. to the highest level since Thursday, but this is still far from the nearly 4.50 PLN observed in mid-July. A similar situation can be observed in the case of the zloty's relations with most of the main currencies, where recent increases in the zloty have continued.

In the past few hours, we have seen an increase in the GBP/PLN exchange rate, which today approached 4.90. This is a consequence of the globally stronger pound over recent days and the nearing key level of 1.30. Although further strengthening of the British currency should not be ruled out in the short term, a significant increase above 1.30 is now rather unlikely, and this also limits the scope for GBP/PLN growth.