Euro Surges Against Złoty as Geopolitical Tensions Rise

The euro strengthened against the Polish złoty on Thursday, reaching its highest level since late 2023. The single currency briefly rose by about 12 groszy and traded at around PLN 4.377 in the morning before climbing to just above PLN 4.40 by 11 a.m.

However, the exchange rate subsequently fell below PLN 4.379 by 2:30 p.m., but still maintained its position as the highest since November 2023 when it traded at PLN 4.42.

Analysts linked the currency movements to geopolitical uncertainty and higher crude oil prices. Bank Millennium attributed the market influence to global factors, including the lack of details about progress in talks between the US and Iran, which contributed to maintained global geopolitical premiums.

PKO BP strategist Mirosław Budzicki also pointed out that monetary policy, macroeconomic trends, and lower GDP forecasts were affecting the złoty. He noted that the central bank was not signaling a need for interest rate hikes, which weighed on the currency.