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The most expensive dollar since April 2017. The zloty would also be very weak against the euro and franc

The exchange rate of the dollar, franc and euro is strongly up

On Thursday evening the dollar exchange rate in the market reached PLN 4.02. Previously, the American currency cost over PLN 4 in April 2017.


The euro exchange rate looks no better. On Thursday, the European currency paid about 4.38-4.39 zlotys on the market. This level was recorded at the beginning of the week, and earlier at the end of August this year. And yes – again to find such a high euro exchange rate one should reach about 2.5 years back.


It is similar in the case of the Swiss franc exchange rate. On Thursday, its quotations reached as much as PLN 4.05. The franc exchange rate has exceeded the PLN 4 barrier regularly since around mid-August this year. Earlier it was so expensive at the beginning of 2017.


Why is the zloty weak?

One of the keys to guess why the franc or dollar exchange rate is at its highest level in about 2.5 years, lies … in Luxembourg. It is there that the Court of Justice of the European Union is located, which a week ago informed that in the already "mythical" case of frank-borrowers it would issue a judgment on October 3. The market feels that the decision of the CJEU may not be favorable for the Polish banking sector, and this effect is in the zloty exchange rate. The good news is that the market usually "discounts" its predictions in exchange rates. This means that if investors consider the CJEU judgment actually dangerous for the banking sector in Poland, the zloty will probably not lose much. On the other hand, if the verdict is accepted "enthusiastically" by bankers, the zloty may clearly strengthen.

The second reason for the poor condition of the zloty is simply uncertainty in the most important European economies. The German economy is close to recession, the data from our western industry are neighbors in 10 years, also the results from e.g. France are not optimistic. Anyway, the data from Poland are also not as stunning as a few months ago and it seems that the slowdown in Germany may still hit us.

Given that data from the US economy are better, the dollar is strengthening against currencies from our region.

The zloty is likely to remain under pressure as long as the dollar benefits from global events. Possible increases in the zloty may also hinder the issues of the CJEU judgment, at least until they cease to be a risk element for the domestic financial system and the economic situation of the Polish economy. As a result, the PLN is likely to remain weak, i.e. close to current levels, and during the influx of negative information it can quickly reach new multi-month lows against both the euro and the dollar

– comments Marcin Lipka from the website.

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