PLN/USD Outlook: Slightly positive, but likely to move sideways, as it currently trades above its recent average and lacks a strong directional driver.
Key drivers:
• Rate gap: The Polish central bank has lower interest rates compared to the US Federal Reserve, which may favor the Zloty against the dollar.
• Risk/commodities: Ongoing geopolitical tensions, including military threats from the US, add volatility to the USD, impacting its attractiveness.
• One macro factor: Poland's recent inflation easing and lower interest rates have positively influenced its currency outlook.
Range: Expect the PLN/USD movement to hold within its recent range, as the pressures on the USD and the Zloty's advantages may balance each other.
What could change it:
• Upside risk: A significant improvement in US economic data could strengthen the USD and pressure the PLN/USD rate.
• Downside risk: Heightened geopolitical tensions or further negative changes in US fiscal policy could lead to additional downward pressure on the USD.
