Bias: bearish-to-range-bound, as the PLN/EUR is currently below the 90-day average and in the lower half of the 3-month range.
Key drivers:
- Rate gap: The National Bank of Poland is maintaining a hawkish approach due to inflation concerns, while the European Central Bank is expected to keep a neutral policy, suggesting a wider interest rate differential that may favor the PLN.
- Risk/commodities: With oil prices currently above their average, volatility in energy costs could impact inflation in Europe, potentially affecting the EUR negatively.
- Economic performance: Poland's economy is projected to grow over 3.5% in 2026, supported by EU funds, which could strengthen the zloty in the medium term.
Range: The PLN/EUR is likely to drift within its recent range, with fluctuations but no significant breakouts anticipated.
What could change it:
- Upside risk: A surprising hawkish shift in the NBP’s stance could uplift the PLN against the EUR.
- Downside risk: Continued negative economic data from the Eurozone could further weaken the EUR, adding pressure on PLN.