EUR/PLN Outlook: Slightly weaker, but likely to move sideways as the rate is below its recent average and remains within a stable range.
Key drivers:
• The European Central Bank's (ECB) commitment to maintaining a cautious approach to interest rates due to stable inflation levels contrasts with the National Bank of Poland’s hawkish stance amid ongoing inflation concerns.
• Oil prices are at recent highs, which generally exerts upward pressure on the euro through increased costs, but have not created significant momentum for the EUR’s appreciation.
• Political gridlock following the recent Polish elections may lead to instability in fiscal policies, potentially weakening the zloty.
Range: The EUR/PLN is expected to hold within its recent 3-month trading band, with no clear direction that suggests a breakout.
What could change it:
• An unexpected shift in the ECB’s monetary policy could provide support for the euro.
• An escalation in political tensions in Poland could exacerbate downward pressure on the PLN.
