EUR/PLN Outlook:
The EUR/PLN pair is likely to move sideways as it trades near its 3-month average and is currently in a mid-range position. Recent weak industrial data from the Eurozone is not providing clear momentum.
Key drivers:
• Rate gap: The European Central Bank is expected to maintain accommodating monetary policies, while the National Bank of Poland faces pressure to cut rates amid weak domestic data.
• Risk/commodities: Oil prices have risen sharply, remaining above the recent average, which can support the euro as higher oil prices often strain the Polish economy due to energy dependence.
• One macro factor: Disappointing retail sales and industrial production have created expectations for NBP rate cuts, increasing pressure on the zloty.
Range:
The EUR/PLN is likely to drift within its recent range as external factors balance the impact of domestic economic conditions.
What could change it:
• Upside risk: A significant rebound in Eurozone economic indicators could strengthen the euro.
• Downside risk: Further declines in Polish economic performance or unexpected NBP policy moves may weaken the zloty.
