The USD to PLN exchange rate has shown notable movement recently, with the USD trading at 60-day lows near 3.5978, which is 1.3% below its three-month average of 3.6463. This decline has been driven largely by a dovish shift in Federal Reserve policy, which has raised expectations for accelerated interest rate cuts in the coming years. The recent spike in jobless claims and mixed economic data from the U.S. has contributed to weakening confidence in the dollar, creating a downward trend in USD strength.
Analysts have noted that as markets digest the Fed's softer stance, the dollar's relative attractiveness diminishes. This is particularly evident as expectations build for multiple rate cuts starting in early 2026. Should inflationary pressures remain subdued, the USD could continue to face downward pressure as traders position for a longer easing cycle, leading to a less favorable currency environment.
On the Polish side, the National Bank of Poland (NBP) recently cut its key interest rate by 25 basis points to 4.00%. This move follows a lower-than-expected inflation figure and suggests a cautious approach moving forward. Analysts warn that Poland's high budget deficit could limit the central bank's options for further rate cuts. Additionally, a Reuters poll indicates that the Polish zloty may retreat from its recent highs, projected to weaken slightly due to anticipated economic stagnation and fiscal pressures.
Political developments in Poland, including the recent election of President Karol Nawrocki, have added uncertainty to the zloty's outlook. His administration's contentious approach to policy has raised concerns among analysts regarding fiscal stability.
In a broad context, as global risk sentiment stabilizes, major currencies like the euro and yen exhibit short-term strength, further contributing to the USD's decline. With the current exchange rate hovering within a narrow range from 3.5813 to 3.7114, it is likely that the USD to PLN will remain susceptible to shifts in U.S. economic data and Fed communications in the coming months. As always, staying attuned to both U.S. and Polish monetary policy dynamics will be essential for anyone engaged in forex transactions involving these currencies.
