USD/PLN Outlook:
Slightly weaker, but likely to move sideways, as the rate is currently below its recent average and hovering around mid-range.
Key drivers:
• Rate gap: The Federal Reserve has held interest rates steady, while the National Bank of Poland is cutting rates to support economic growth, which reduces the USD’s appeal.
• Risk/commodities: Recent geopolitical tensions have impacted safe-haven demand for the USD, causing it to underperform.
• One macro factor: Poland's inflation continues to fall, now at its lowest since mid-2024, supporting the PLN's stability.
Range:
Expect USD/PLN to drift within its recent range, reflecting mixed signals in fundamentals.
What could change it:
• Upside risk: A surprise increase in US interest rates could strengthen the USD.
• Downside risk: Further geopolitical issues could dampen USD demand, pushing the rate lower.