EUR/PLN Outlook: Slightly positive, but likely to move sideways as the pair trades just below its recent average and is near the middle of its 3-month range.
Key drivers:
• Rate gap: The European Central Bank is likely to maintain current interest rates, while the National Bank of Poland may continue cutting rates, affecting the Euro's performance against the zloty.
• Risk/commodities: Rising oil prices could create inflationary pressures in the Eurozone, potentially impacting the Euro negatively.
• One macro factor: Poland's inflation has recently eased, aligning with central bank targets, indicating overall economic stability that supports the Zloty.
Range: EUR/PLN is expected to hover around recent levels, staying within its established range as other factors stabilize.
What could change it:
• Upside risk: A significant improvement in Eurozone GDP could lend strength to the Euro.
• Downside risk: Further cuts to interest rates in Poland or negative economic news could weaken the Zloty.