The euro fell.  The massive strength of the dollar obscures the currencies of emerging markets!  Find out how much you will pay for 1 Pound (GBP), Yen (JPY), Franc (CHF), Euro (EUR), Forint (HUF), Dollar (USD), Crown (CZK)

See how much you would pay for 1 Pound (GBP), Yen (JPY), Franc (CHF), Euro (EUR), Forint (HUF), Dollar (USD), Crown (CZK)

Friday brought minor changes in the zloty, keeping the EUR/PLZ close to 4.64-4.65.

Retail sales, which rose in nominal terms by 22% year-on-year, and in constant prices by 9.6% year-on-year, were also added to the data on high industrial production growth, which was released earlier in the week, in both cases exceeding economists’ expectations. According to peacekeeping economists, the latest data suggests that gross domestic product may have risen as much as 10% year-over-year in the first quarter. This data, along with strong wage pressures and higher inflation, reinforce expectations for an interest rate hike in Poland. However, we did not notice a significant appreciation of the zloty, since in Poland real interest rates remain extremely negative, and monetary policy is being tightened not only in Poland or other developing countries, as well as in developed countries. We expect that next week the EUR/PLN rate will be maintained in the range of 4.60-4.65.

Currency rates on forex

See also: The unprecedented situation in the real estate market: a shock to the rental market!

A strong US dollar is an obstacle to strengthening emerging market currencies

After a temporary rally in the EUR/USD pair above 1.09, the Friday session brought a comeback even below 1.08. Recent hawkish comments from Fed members, including Chairman J. Powell, who confirmed that a 50 basis point rate hike would be considered, added strength to the US currency. In contrast, the euro, which was rising earlier in the week due to hawkish comments from European Central Bank members, lost some activity after comments from President C. Lagarde, who expressed concerns about an economic slowdown. The information that Macron won the second round of the French presidential elections had no effect on the performance of the euro.

Dollar Index vs. EM MSCI Currency Index

In the domestic interest rate market, an event-rich calendar will support high volatility in quotes in the coming week. The two-year bond yield should remain close to 6.75% and the 10-year bond yield around 6.30%.

See also: The US dollar is facing a huge correction!

The most significant event will be the publication on Friday of preliminary inflation data for April

The CPI is expected to rise around 11.4% y/y versus 11% in March. It should be noted that all inflation readings in 2022 turned out to be higher than expected by an average of 0.4 percentage points. Percentage A further rise in inflation will put pressure on the Monetary Policy Committee, whose members indicate the possibility of increasing the NBP reference rate to nearly 7.5%. At the end of last week, the entire derivatives market was priced in an increase in the key rate above 7.0%.

profitability of treasury bonds

This market expectation may be reinforced by a rate hike in Hungary on Tuesday (in the case of the key rate, a move of 100 basis points to 5.40% is expected). Although in April we noticed an activation of demand for longer fixed-rate bonds, information about the upcoming releases may affect the market slightly. BGK indicated the possibility of issuing bonds at auction on Wednesday, and on Friday the Ministry of Finance will present the details of the auction in May. We can expect total Treasury sales of PLN 10 billion in one regular swap auction and one auction.

View treasury bond prices

In the second quarter of 2022, the valuation of Polish bonds may be affected by negative trends in the global market

The Federal Reserve is confirming its willingness to cut the balance sheet and raise interest rates to neutral later this year. Comments from ECB representatives indicate that a faster withdrawal of non-standard monetary support is being considered in the eurozone. These signals will be further reinforced by the release of flash data on inflation in the Eurozone.

Euro price, dollar price, oil price, gold price, WIG20 . quote

See also: Check how much you will pay today in Francs, Pounds, Forints, Euros, Koruna, Dollars and Yen


Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Tourist weekend at the Poznan Fair. “There will be approximately 250 motorhomes and caravans.”

TOUR SALON, CARAVANS SALON and The Traces of Dreams Travel Festival –…

The housing market is slowing down, but there will be no fall in prices

The ambiguous geopolitical situation associated with the war in Ukraine, high inflation,…

Trapped after the Polish Lada. Tens of thousands of income per month, and the bank: zero creditworthiness! How is this possible? [4.03.2022]

An IT specialist with a good income – it is enough to…

Inflation will force interest rates to rise. Average installment up to PLN 250 per month

We are on a collision course with perhaps even double-digit inflation and…