Polish złoty hits 12-month high on weakening US dollar

The Polish złoty reached 4.19 against the U.S. dollar on Thursday

editor: REMIX NEWS
author: Interia.pl
via: PAP

The Polish złoty (PLN) strengthened on Thursday against both the U.S. dollar and the euro, reaching 4.19 against the dollar in the afternoon, its highest level in over a year.

According to currency analysts, this is a result of the good news in America on inflation. It has fallen to 5 percent giving a rise to speculation that there would be no more interest rate rises. The effect of this is that investors are looking to invest in other markets, such as those in Central Europe where as a result of higher inflation figures interest rates are unlikely to fall for some time. 

Poland’s currency is therefore continuing the process of recovering last year’s losses. Also, as long as the euro is strengthening against the dollar, this is good for the złoty.

The currency is also benefiting from the fact that investors see the geopolitical perspectives for Poland as being stronger than last year. Analysts do not feel that there have been any changes in monetary or economic policy that could explain the złoty’s rise. 

The złoty will of course be susceptible to any recession on world markets and banking crises. However, financial experts would not be surprised to see the euro go below 4.50 złoty and the U.S. dollar fall to 4.00 złoty. This would mean the złoty would return to its level prior to the conflict in Ukraine.

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