Friday began relatively calmly, with stock markets in Europe and the United States at record levels, until news from Austria and Germany caused panic among investors.
The changes affected mainly the euro, the safe-haven franc and the German stock market, but also the zloty and yields on Polish bonds lost. But one by one...
The euro against the dollar fell more than 0.6 percent on Friday, below $1.13, the lowest level since July 2020. This came as ECB chief Christine Lagarde said there was no point in tightening policy as inflationary pressures in the Eurozone are expected to wane. The ECB president also said that it will still be important for monetary policy to include an appropriate calibration of asset purchases, even after the pandemic is expected to end. Risks may still remain and the ECB needs to stand by and support the recovery and a sustained return of inflation to the 2% target. Meanwhile, Europe is grappling with the fourth wave of the pandemic, with Germany and Greece following the Czech Republic, Austria and the Netherlands in imposing Covid-19 restrictions. A lockdown is being considered in Germany, which seems like it may have further shaken the euro and the German Dax index.
Above all, it is also worth mentioning that the EUR/CHF exchange rate has fallen to its lowest level since 2015, below 1.0470, in the face of the weakening euro. For the moment, this does not lead to intervention by the Bank of Switzerland, but it is worth bearing in mind, as it was in 2015 that the market caught its bottom after the liquidation of the minimum EUR/CHF exchange rate at 1.2000. In this whole puzzle of retreat to risk, the zloty seems to be losing powerfully. The US dollar rose to 4.15 today, while two weeks ago it was at PLN 3.96. The EUR/PLN exchange rate, meanwhile, rose to its highest level in 12 years at 4.68, while the British pound strengthened to PLN 5.58 and appears to be the most expensive since 2016.
The end of the week threw up a number of challenges for investors at the end of November, which will have to be faced at the end of this year, but also in 2022. We will also talk more about this at the conference to be held on 27 November in Warsaw. Details at: https://konferencja-forex.cinkciarz.pl/
Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service)
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