The złoty strengthened. The euro rate is the lowest in a month. The dollar is 4 groszy more expensive

WALLSTREET

Krzysztof Kolany 2025-05-12 09:41 Chief Analyst at Bankier.pl

published 2025-05-12 09:41

The improvement in sentiment on global markets combined with the reduction in expectations regarding further interest rate cuts in the NBP caused movement of the zloty exchange rate and led to a decline in the euro exchange rate to around April lows.

photo: Lumi Studio // Shutterstock

On Monday at 9:25 the euro rate was 4.2300 PLN and was only slightly higher than at the end of Friday's quotes. At the end of last year The euro rate for the week was even below PLN 4.22, marking the lowest value in a month.

The signal was therefore confirmed generated by breaking through the level of PLN 4.25 . Technical analysis assumes, that we should now see the euro fall in around PLN 4.20. That is, the lower limit of the spring consolidation, in which we have been stuck since the outbreak of President Trump's tariff wars and the first announcement of a reduction interest rates at the NBP.

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Now it turns out that these two factors may not be so important. strong as previously feared. The US administration is trying to bring about trade agreements with its largest partners. - The United States United States, China make 'significant progress' in two-day talks trade and customs in Switzerland – said US Treasury Secretary Scott Bessent.

At the same time, the futures market has already "erased" at least one expected cut in interest rates in Poland. Before May the Monetary Policy Council's announcement and the conference of President Glapiński, the FRA market estimated that rates would fall to around 4% in early 2026. Now he estimates reductions to 4.40% - that is, about 35 basis points less than a week ago. This good news for the zloty.

What is worse is the strengthening of the dollar against the euro. The EUR/USD exchange rate fell strongly for the third session in a row, falling to the level of 1.11. As a result, on Monday morning on the Polish market the dollar rose by over four groszy, reaching the price of PLN 3.7992. Thus, the USD/PLN exchange rate reached the upper limit of the local sideways trend in the range of PLN 3.70-3.80.

The Swiss franc weakened, which was valued at PLN 4.5121 in the morning. In the case of the franc-zloty pair the barrier to further declines is the round level of PLN 4.50, at which local downward waves in April and May stopped.

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