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Eurozone Inflation – October 2022. Record again. Here’s what that might mean for the zloty exchange rate

Eurozone Inflation - October 2022. Record again.  Here's what that might mean for the zloty exchange rate

The core inflation rate in October 2022 was 5.0 percent in the Eurozone. (as expected), when 4.8 percent was recorded in September.

After, after September inflation dataIn October, the ECB’s Governing Council raised the three rates (the rate on major refinancing operations, the lending facility and the deposit rate) by 75 basis points to 2 percent, 2.25 percent and 2.25 percent. Straight. And 1.5 percent, this is the highest level in a decade, and the council indicated that its future decisions regarding the level of interest rates will depend on upcoming data on inflation and the economic situation.

Experts expect more interest rate hikes by the ECB in the coming months, but not as sharp as recently. This possibility will increase, especially if data on inflation in the Eurozone continues to appear negative.

The situation in the eurozone is also important for the zloty exchange rate

Because of the strong dependence of our economy on trade with the Eurozone, The decisions of the European Central Bank also have a direct impact on, among other things, the exchange rate of the zloty. Recently, the zloty exchange rate has “merged” even more with the euro exchange rate – when the euro strengthens against the dollar, the zloty moves in the same direction.

This is the case in recent days when the euro rises against the dollar and The zloty is also strengthening against the dollarwhich recently managed to get down to just over PLN 4.50 per dollar.

How will the EUR/PLN exchange rate behave until the end of the year? weather forecast

As experts from ING noted in a comment on Thursday, The zloty is also recovering against the euro. “The nearest support area is around PLN 4.67-68. However, a drop to PLN 4.65 cannot be ruled out in the horizon of a few days. The mood in the markets has rapidly improved, and Investors’ confidence in rapid interest rate cuts feed it (US Central Bank – editorial note) Emerging market currencies are preferred”.

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The rest of the article is under the video

See also: “They adhered to the Mussolini principle.” He commented on the fiasco of the Law and Justice Party regarding the operations of the KPO

Our estimates indicate that The zloty is still around 3 percent. weaker against the euro (…) Because of political factors such as the conflict with the European Union or the war in Ukraine. anyway Many factors still speak against goldthe rise in the euro/dollar exchange rate greatly increases the chances of this The EUR/Zloty pair will end the year below 4.80 PLN. For now, this is still not the most likely scenario, but investors are pleased with Ukraine’s military advance, or the Polish government’s attempts to reach an agreement with European Commission. The risk distribution still points to a depreciation of the zloty at the end of 2022, but it is likely to be of a smaller magnitude than we have assumed so far.

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