Gold remains firm after the meetings of the Monetary Policy Council and the European Central Bank. This week will be decisive results of the US Fed and the data from the national economy.
Gold on Monday in the afternoon gained against the euro, Swiss franc and British pound, while remaining close to Friday’s closing levels in relation to the dollar. At 14:38 the EUR / PLN tested the level of 4.2786 zł, CHF / PLN 3.9020 zł, USD / PLN zł 3.8513 and GBP / PLN 5.5210 zł.
Golden still still support the events of last week. Namely, the results of meetings of the European Central Bank (ECB) and the Monetary Policy Council (MPC). ECB decided on a much deeper loosening monetary policy than initially assumed, analysts and economists. Such a move, of course, must raise the question whether the situation is so bad in the European economy, to take such action? As well, you should ask what the central bank will do when the crisis get worse? It is, however, now the markets will not take. What matters is that as part of the “printed euro” can be bought Polish assets. And it reinforces the expectation of appreciation.
Polish currency also supports the Monetary Policy Council. Published latest, reduced economic forecasts, as well as the subdued voices coming from the Council, not born expectations for interest rate cuts in the future. And that was enough for the zloty strengthened.
Another source of strength for gold can also be scheduled for this week releases of macroeconomic data from the national economy. Today, investors learned report on M3 money supply, the annual growth rate slowed down in line with forecasts in February to 10% from 10.2% in January. On Tuesday, a report will be published on the NBP inflation and monthly data on inflation and balance of payments. A day later, they will see the light of day reports on wages, employment and core inflation. A note on Thursday, markets will focus on data on producer prices, industrial production and retail sales. In recent times, if only you count inflation data, the majority of these reports surprised on the upside. It is not excluded that now will be similar, allowing a more optimistic look at the domestic foreign exchange market.
When reading the above list data can not be forgotten, however, that all of them can outshine one event. I probably eclipse. Namely the results of the US Fed. Investors know them on Wednesday. The change in US interest rates is not expected, but the important thing will be published on the macroeconomic forecasts and interest rates, as well as what the press conference after the meeting say the Fed chief Janet Yellen.
Fed meeting is the main event of the week. And that’s probably it ultimately will decide in which moods, and at what levels, will end the week Polish pair. From the point of view of the zloty, but also other emerging market currencies, it would be best if the results of the Fed meeting were interpreted as dovish, leading to the weakening of the dollar and, indirectly, to strengthen these currencies. Strengthening of the dollar in response to the results of the Fed meeting would be counterproductive for the zloty. And not just in relation to the “green”, but to a broad group of major currencies.
Martin Kiepas, Chief Analyst Admiral Markets AS, Branch in Poland
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