In early August, the main currency pairs remained in their respective trends. Despite worrisome signs from the US economy, American companies continued to deliver (mostly) better-than-expected quarterly results, keeping the EUR/USD on the rise to reach $1.3260, its highest level since May. That is an important resistance level, which the market tried to reach after much worse-than-expected non-farm payrolls report (a loss of 131,000 against the forecast loss of 65,000). Breaking that resistance level could cause the EUR/USD to go as high as $1.35, although a corrective movement to $1.30 is possible.

A stronger euro is helping the złoty. The Polish currency continued to gain against major currencies after good news from Poland’s largest trading partner, Germany.

As stock markets increased, risk aversion declined and foreign capital entered the market. The EUR/PLN dropped below the zł.4.0 level for the first time since mid-May and was being quoted at zł.3.98 on Friday, August 6.

The weakness of the US dollar is apparent against major currencies, including the złoty. The USD/PLN (at zł.3.14 two weeks before) approached the zł.3.0 barrier and breaking it could push the złoty to zł.2.95 against the dollar.

After this period of appreciation, investors can expect the market to cool down for a while. But if optimism remains, the złoty could get even stronger in the next two weeks.

Adam Narczewski, X-Trade Brokers Dom Maklerski SA