PLN/EUR Outlook:
The PLN/EUR exchange rate is currently below its recent average and near its low end of the three-month range. This indicates a bearish outlook, primarily influenced by domestic economic pressures.
Key drivers:
- Rate gap: The National Bank of Poland's monetary easing stance contrasts with the European Central Bank's (ECB) more stable approach, contributing to a weaker zloty.
- Risk/commodities: With oil prices significantly above their recent average, rising energy costs may continue to pressure the zloty as imported goods become more expensive for Poland.
- One macro factor: Weak retail sales data and decreasing industrial production in Poland have heightened the likelihood of additional rate cuts, impacting the zloty's performance.
Range:
The PLN/EUR is expected to hold within its current range, with limited scope for significant movement as economic factors balance each other.
What could change it:
- Upside risk: Any unexpected improvement in Poland’s economic data could lead to a stronger zloty.
- Downside risk: Continued disappointing economic reports or escalated geopolitical tensions could further weaken the PLN.
