What follows from the ECB's statements (Afternoon analysis 26.07.2018)

The press conference after the ECB meeting did not trigger major changes in the euro. The zloty benefits from a better sentiment between Brussels and Washington, but the potential for its appreciation may be limited.

Draghi's words in line with expectations

There was not much new information that could be learnt from the press conference after the European Central Bank (ECB) meeting. The overall attitude of the Chairman of the Board of Directors, Mario Draghi, was positive. Risks for economic growth are balanced and inflation is on the right track.

Draghi expressed his satisfaction with yesterday's agreement between the European Union and the United States in the context of trade policy. On the other hand, although inflation is moving towards the target, its core component (excluding fuels and food) is below the 1.0% year-on-year limit, suggesting the need for a mild monetary policy.

The doubts as to the date of keeping the interest rates unchanged have not been clarified. The statement 'through summer 2019' is not entirely clear, and in addition, when translated into other languages, it has raised even more doubts. In general, the increase before September 2019 does not seem to be expected, but these few months may give some indication of the general attitude of the ECB (more hawkish or dovish).

The EUR/USD pair starts the US session below the 1.1700 limit and the lack of growth in the main currency pair after the Trump-Juncker meeting is linked to the fact that it was not only positive for the Union but also for the US. In the US, there are better chances of accelerating monetary tightening in the event of a further economic recovery. This partially confirms the scenario that both the very good economic situation and fears of global GDP growth are favourable for the dollar. Only indirect scenarios can help the euro to some extent.

Stronger zloty but growth potential is limited

Fewer trade tensions between the United States and the European Union are good news for the zloty. Maintaining the status quo in the context of passenger car exports to the USA (worth about 40 billion USD yearly) is good news for the EU (mainly for Germany), as well as for Poland, both in terms of the actual impact on industry and sentiment in the economy.

Today, the EUR/PLN dropped to around 4.28 and the probability is growing that the value of EUR expressed in PLN will remain below the 4.30 limit. On the other hand, the sustained strength of USD may limit further zloty appreciation. However, overall positive trade reports may increase the zloty's stability and its resilience to external factors in the longer term if, of course, yesterday's arrangements between the Trump and Juncker are maintained.