The Polish zloty (PLN) is currently subject to considerable volatility influenced by several key factors. Recent analyst forecasts and market updates suggest a challenging outlook for the PLN. UBS has revised its EUR/PLN forecast to 4.25, highlighting heightened risks from global trade tensions and domestic political challenges, which are expected to persist through Q2 2026.
The National Bank of Poland (NBP) has recently cut its benchmark interest rate to 5.0%, a move driven by declining inflation and disappointing economic data, particularly in retail and industrial production. This dovish monetary stance is contributing to the zloty's depreciation, with some analysts projecting EUR/PLN could approach 4.280. The inflation rate has eased to a nine-month low of 4.2%, further fueling expectations for additional rate cuts that could put additional downward pressure on the currency.
Political uncertainty looms following the victory of President-elect Karol Nawrocki and the confidence vote for Prime Minister Donald Tusk. These developments have raised concerns regarding Poland’s economic stability and trajectory, which could adversely affect the zloty in the medium term.
Price data indicates that the PLN is trading at 0.2756 against the USD, remaining just 0.6% above its three-month average of 0.274, within a stable range of 4.0%. Versus the euro, the PLN trades at 0.2350, closely aligning with its three-month average and within a narrow range of 1.1%. The GBP pair reflects similar stability, with the PLN at 0.2033, while against the JPY, the PLN is noted at 40.69, 1.1% above its average but within a 5.0% trading range.
In summary, factors such as economic indicators, central bank policies, and political developments are crucial in determining the PLN's trajectory. Market participants should remain vigilant of these dynamics, as adjustments to forecasts and monetary policies may lead to further fluctuations in the zloty.
