The EUR to PLN exchange rate bias is currently range-bound.
Key drivers influencing this include the latest interest rate cuts by Poland's National Bank, with the rate now at 4.00%, which could weaken the PLN against the EUR. The ECB's cautious stance on raising rates, combined with revived growth forecasts, puts upward pressure on the euro. Additionally, the ongoing geopolitical tensions, particularly due to the war in Ukraine, continue to create economic uncertainty in the Eurozone, influencing the euro's performance.
In the near term, the EUR/PLN is expected to trade within a narrow range, reflecting recent patterns of stability.
An upside risk could emerge if the ECB shifts to a more hawkish stance, while a downside risk includes deteriorating economic conditions in Poland that may prompt further interest rate cuts. Recent oil prices sitting below their three-month average could also impact the euro, as fluctuations in energy costs often influence currency valuations.