USD/PLN Outlook:
Slightly weaker, but likely to move sideways, as the rate is below its recent average and lacks a clear driver.
Key drivers:
• Rate gap: The Federal Reserve has held interest rates steady, while the National Bank of Poland has been cutting rates to stimulate growth amidst declining inflation.
• Risk/commodities: The recent downturn in USD reflects a recovery in global risk appetite, reducing demand for safe-haven currencies like the dollar.
• One macro factor: February saw a notable easing of inflation in Poland, supporting a more stable economic outlook, which may limit the zloty’s depreciation against the dollar.
Range:
The USD/PLN pair is expected to drift as it operates within its recent range.
What could change it:
• Upside risk: A significant improvement in US payroll data could bolster USD demand.
• Downside risk: Continued geopolitical tensions affecting US assets may pressure the dollar further.
