Polish Zloty: Slow NBP hawkish shift weighs on PLN - Commerzbank

FXStreet Insights Team FXStreet

Commerzbank’s Tatha Ghose reports that Polish headline and core inflation have re-accelerated, with seasonally adjusted monthly rates now clearly above target. This makes earlier signals from National Bank of Poland (NBP) Governor Adam Glapinski about possible rate cuts obsolete. However, because the central bank is turning hawkish more slowly than inflation is rising, the development is seen as negative for the Polish Zloty (PLN).

Re-accelerating prices challenge NBP guidance

"Polish CPI inflation was confirmed accelerating to 3.0%y/y in July from 2.5%y/y in June, matching the original consensus. The acceleration was overwhelmingly fuel-driven: passenger fuel prices jumped by 13.9%m/m, taking the annual fuel inflation rate to 15.8%y/y from 5.3%y/y in June. Core inflation also moved in the wrong direction. "

"Poland’s Central Bank (NBP) reported that its main core indicator, excluding food, drinks, fuel and energy, accelerated to 3.1%y/y in July from 3.0%y/y in June. The 15% trimmed mean held at 2.8%y/y, but other core measures accelerated, with the index excluding regulated prices accelerating to 2.8%y/y and the index excluding the most volatile prices to 3.4%y/y."

"As usual, this year-on-year summary is not our main point: the more relevant seasonally-adjusted month-on-month rates of increase have re-accelerated sharply during June and July and are now clearly above-target. This means that NBP governor Adam Glapinski’s earlier indication that rate cuts may soon follow should now be treated as obsolete."

"The development is negative for the zloty because inflation is accelerating faster than NBP is turning hawkish; NBP will at best signal unchanged rates for longer, which may not satisfy the FX market."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold remains range-bound below $4,200

Gold has given up some ground after an initial bullish attempt to reach weekly highs, returning to below the $4,200 mark per troy ounce on Friday. The US Dollar’s strong upside momentum, combined with rising US Treasury yields across the curve, seems to keep further gains in the yellow metal under scrutiny.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?

The Euro is not the sick man of Europe. France's bond market is

EUR/USD remains under pressure, near the 17-month low of 1.1161 reached on Monday. The pair has lost more than 7% since its yearly peak, as concerns over France's public finances increasingly weigh on the single currency. But behind the weakness of the Euro (EUR), the problem does not necessarily lie with the European economy as a whole.