PLN/EUR Outlook: Slightly weaker, but likely to move sideways, as the rate is near its 90-day average and recent lows without a clear driver.
Key drivers:
- Rate gap: The National Bank of Poland has reduced interest rates, benefiting the zloty compared to the European Central Bank, which is expected to keep rates stable in the short term.
- Risk/commodities: Oil prices are currently high, which could weigh on the euro's strength, especially if inflationary pressures continue in the Eurozone.
- One macro factor: Poland's inflation has fallen to align with central bank targets, but a recent downgrade in Poland's credit outlook indicates rising public debt may impact investor confidence.
Range: The PLN/EUR exchange rate is likely to hold within its recent stable range of movement.
What could change it:
- Upside risk: A stronger-than-expected economic performance in Poland could boost the zloty.
- Downside risk: Any significant weakening of the eurozone's economy in upcoming GDP reports may negatively impact the zloty.
