Foreign exchange market update: PLN devaluation?

Foreign exchange market update EUR/PLN
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EUR/PLN under pressure

The interest rate spiral continues to turn rapidly. Despite an interest rate hike of 75 basis points and thus a key interest rate of 5.25%, the zloty cannot generate any lasting buying interest. In the last few weeks, Poland’s central bank has once again emphasized that there will be no uncontrolled price increases and that the top priority is to get the elevated inflation levels under control. One might argue that an interest rate level of more than 5% is attractive for investors, but the zloty is neither bought nor sold on a sustained basis due to persistent fears of intervention. The central bank will do everything it can to prevent the zloty from adverse currency moves in order to avoid additional imported inflation.

Wide trading range expected

Rate jumps (in both directions) are to be expected again and again for the rest of the year, but analysts are currently not expecting any major trend to develop in 2022. A trading range of 4.6000 – 4.8000 is expected, with high probability that we leave this range in one or the other direction for a short time period.

Support 4,6500
Support 4,6000

Resistance 4,7300
Resistance 4,8000

The chart below shows the EUR/PLN trading range expected by analysts:

FX market update EUR/PLN
Source: TradingView

Rate moves beyond the 4.6000 to 4.8000 trading range should not last too long. The risk of currency interventions is constantly present and a further increase in interest rates is considered very likely.

For more information on the foreign exchange market, please feel free to contact our forex experts!

Please note that this elaboration was completed on 13/05/2022 09:59 CET.
This article is for informational purposes only and does not take into account the particular circumstances of the readers. It does not constitute financial advice. The content of this article is not intended as an offer or solicitation to buy or sell any fx or to take any other action and are not intended to form the basis or part of any contract. Clients should seek independent professional advice and draw their own conclusions with respect to the suitability of the transaction, including its economic merits and risks.The information contained in this article is public data and has been obtained from sources believed by amnis to be reliable and accurate. Amnis Treasury Services AG makes no warranty or representation as to its correctness, accuracy or completeness for a particular purpose. Neither Amnis Treasury Services AG nor any of its employees shall be liable for any damages whatsoever arising out of the use of this article, its contents or otherwise.

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Gerhard Scharinger
Gerhard Scharinger is the Head Markets of amnis. He is an expert in Foreign Exchange, Treasury Management, Economics and Hedging. Besides various published articles and foreign exchange news he is also an international speaker at different events. Follow him and amnis on LinkedIn, Twitter and Facebook to keep up with the latest industry news and insights.
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