EMEA FX Talking: External headwinds up against local stories
EUR/PLN: Zloty swings with market sentiment • EUR/PLN has moved towards 4.40 after trading around the 4.30 level during summer. With market sentiment deteriorating amid geopolitical tensions in Iran, France and Russia, the coming weeks could challenge the zloty. • PLN has recently strengthened its correlation with EUR/USD, so the dollar’s future moves will be ...
The EUR/PLN pair has climbed towards the 4.40 mark after hovering around the 4.30 level during the summer months. This upward movement has been fueled by deteriorating market sentiment, which has been exacerbated by geopolitical tensions in Iran, France, and Russia. The zloty's performance is now more closely correlated with the EUR/USD, indicating that the dollar's future movements will play a crucial role in shaping the currency's trajectory.
Despite these challenges, analysts retain a medium-term positive outlook on the zloty, driven by robust GDP momentum and persistent outperformance. However, the risk landscape has become less favorable, with the National Bank of Poland potentially pausing its rate hikes and a contentious budget debate potentially exposing weaknesses in the currency.
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