EUR/PLN Outlook:
Slightly positive, but likely to move sideways, as the rate is near its 90-day average and lacks a clear driver.
Key drivers:
• Rate gap: The European Central Bank has held interest rates steady, maintaining a cautious approach compared to the Polish central bank's recent interest rate cuts.
• Risk/commodities: Oil prices have surged, trading significantly above their recent average, which can elevate inflation concerns and indirectly affect the euro.
• One macro factor: Polish inflation has eased, creating a stable economic backdrop, while uncertainties arising from recent political developments may keep the PLN under pressure.
Range:
Movement within the recent 3-month range is likely to hold steady, as no significant shifts in the market outlook are present.
What could change it:
• Upside risk: A substantial increase in Eurozone economic indicators could improve confidence in the euro.
• Downside risk: Further deterioration in political stability in Poland could negatively impact the zloty, pushing the EUR/PLN rate higher.
