PLN/USD Outlook:
Slightly positive, but likely to move sideways; the rate is above its recent average but lacks a clear driver.
Key drivers:
• Rate gap: The National Bank of Poland has been cutting interest rates while the Federal Reserve has held rates steady, widening the interest rate differential in favor of the USD.
• Risk/commodities: Softening oil prices may support the PLN as inflation eases, helping stabilize the Zloty in the face of falling commodity prices.
• One macro factor: The US added significantly more jobs than expected, indicating strength in the labor market, which could bolster the USD further.
Range:
Expect the PLN/USD to drift within its recent 3-month range, as no strong directional signals are apparent.
What could change it:
• Upside risk: Any indication of renewed Federal Reserve interest rate hikes in reaction to strong economic data could strengthen the USD.
• Downside risk: Continued geopolitical tensions and a persistent "sell America" trend may weaken the USD further, putting added pressure on the exchange rate.
