The first two weeks of June were full of negative emotions on the financial markets. The main event last week was the still unsolved problem of the Greek debt. Investors are not sure how the ECB, IMF, Germany and France will tackle the problem and whether the Greek government will succeed in introducing a new austerity plan.

The other negative signals come from the US economy. The poor data from the labor market and the manufacturing sector caused a serious decline on the equity markets. They also influenced the commodities market (Brent crude fell below $115 per barrel) and the strength of the Swiss franc (which gained against the dollar and the euro).

That negative sentiment seriously affected the Polish currency market. Despite an interest rate hike of 25bp in June and the highest rate of inflation in the last 10 years (5 percent y/y in May), the Polish currency fell against the euro, the dollar and the Swiss franc. This shows the power and the seriousness of the mentioned problems.

The strength of the Swiss franc is a serious problem for many Polish families, who have mortgage loans in francs. The strength of that “safe haven” currency is also supported by good data from the Swiss economy.

The short-term condition of the Polish currency will depend on the situation in Greece, new data from the US and signals from the Polish Central Bank (whether it will decide to tighten its monetary policy faster than expected or not).

Paweł Kordala, X-Trade Brokers Dom Maklerski SA