The franc’s rally against the euro started last Friday, but has continued this week. Admittedly, after reaching the level of the franc and seven cents per euro, we have a moment of stabilization, but about a cent and a half rise is very noticeable in the markets.
As the franc appreciates against the euro, this means that even if the zloty is stable against the euro, the franc will appreciate against the zloty. The centimeter and a half mentioned above currently translates to approximately 6 francs more expensive with the same strength as the zloty. What is the reason for the sudden strength of the Swiss currency? First, there is an increase in risk in the markets. On the one hand, we have fallen back into the trap that the epidemic is dying out, yet it is not rosy. Second, the confusion about the Americans’ flight from Afghanistan adds its own confusion.
We got a huge data package from Poland this week. If we describe it briefly, then we will use the phrase that almost lived up to the expectations of analysts. Salaries and employment grew 0.2%. Slower throughout the year than expected. Industrial production fell 0.7%, and retail sales fell 0.1%. On the other hand, it is worth noting that after the recent good data, the outlook towards Poland was quite optimistic. The only reading supporting the zloty was a faster-than-expected rise in core inflation. The price hike has revived the debate about raising interest rates faster than expected so far. However, it is hard to be happy because our money is less valuable.
Last week ended with a sharp decline in the value of the US currency, and on the back of this move, we got profit taking from the recent consolidation and weaker than expected business climate indicators. This week, the dollar ended each day stronger against the euro this week. On the one hand, very strong macroeconomic data is to blame, and on the other hand, we cannot forget the texts from the FOMC meeting. These two issues boil down to a common conclusion: the situation abroad is improving and faster than previously thought that there could be an increase in interest rates and the end of the asset purchase program. This in turn makes investors appear more friendly towards the dollar.
Maciej Przygórzewski – Senior Analyst at InternetowyKantor.pl
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