EUR/PLN Outlook:
The EUR/PLN is likely to move sideways as it is currently near its 90-day average and sits within the mid-range of its recent trading band. There is no strong directional driver pushing it one way or the other at the moment.
Key drivers:
• Rate gap: The European Central Bank is maintaining an accommodative stance, while signs of rate cuts from the National Bank of Poland are appearing due to weaker economic data.
• Risk/commodities: Rising oil prices, now significantly above their 3-month average, may support the euro as they impact overall inflation, which is relevant for both currencies.
• One macro factor: Pressure from a negative outlook on Poland's credit rating could add downward pressure on the zloty, impacting its exchange rate.
Range:
Expect the EUR/PLN to drift within its recent 3-month trading range, given the lack of compelling drivers.
What could change it:
• Upside risk: Stronger economic data from Germany could elevate the euro.
• Downside risk: Continued economic weakness in Poland could trigger further adjustment from the National Bank of Poland.