EUR/PLN Outlook: Slightly positive, but likely to move sideways as the rate is near its recent average and lacks a clear driver.
Key drivers:
• Rate gap: The European Central Bank is cautious about monetary policy, while the National Bank of Poland is under pressure to consider rate cuts due to falling inflation.
• Risk/commodities: The rise in oil prices is likely to impact inflation, influencing both the euro and the zloty as they navigate energy costs.
• One macro factor: Poland's inflation rate fell to align with targets, raising speculation about future interest rate cuts, which could weaken the zloty if realized.
Range: EUR/PLN is likely to hold its position within the recent 3-month range, given its current stability.
What could change it:
• Upside risk: A significant recovery in Eurozone economic indicators could strengthen the euro.
• Downside risk: Negative geopolitical developments or higher budget deficits in Poland may weaken the zloty further.