USD/PLN Outlook:
Bearish, as the rate is below its recent average and near recent lows.
Key drivers:
• Rate gap: The Federal Reserve has held interest rates stable while the National Bank of Poland has lowered rates, widening the gap in monetary policy.
• Risk/commodities: The US dollar is under pressure due to geopolitical tensions and a downward trend in investor confidence, impacting its appeal against the zloty.
• One macro factor: Declining inflation in Poland is creating a more stable economic backdrop, supporting the zloty amid the Fed’s cautious stance on the dollar.
Range:
Expect the USD/PLN to test recent lows within a stable range, facing downward pressure.
What could change it:
• Upside risk: A significant improvement in US job data could bolster the USD.
• Downside risk: Continued geopolitical tensions may lead to further declines in the USD, impacting its performance against the PLN.