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Currency and Stock Markets Weekly Outlook

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Spectacular Events

Mon, Sep 15 2008, 07:54 GMT
by Adam Narczewski

X-Trade Brokers, XTB  |  View company's profile


This past week currencies reacted to spectacular events instead of macroeconomic data. Last weekend, the U.S government announced that it will nationalize Fannie Mae and Freddie Mac, two of the largest institutions specializing in mortgages. The information was a positive kicker for the U.S dollar, which remained gaining till it reached $1.3881 against the euro. A correction movement on Friday, after lower than expected PPI inflation publication, lifted the Eurodollar to $1.4105.

Also very interesting was this past week in Poland. The national currency kept losing value till mid-week, mostly because of a strong dollar. Things changed on Wednesday, when the Polish Prime Minister, Donald Tusk, shocked the local financial at the financial forum in Krynica announcing that Poland might introduce the Euro already in 2011. That is a very brave declaration since Poland needs to meet many standards in order to join the Euro zone. The reaction of investors was immediate. The Złoty abruptly started gaining value and remained strong till the end of the week. The local currency advanced to zł.3.3490 (from zł.3.4720) against the Euro and to zł.2.3705 (from zł.2.4595) against the dollar. Will the Złoty strengthen next week even more? Very probable, since a correction on the EUR/USD is expected and Polish currency follows that trend.

Published on  Mon, Sep 15 2008, 07:56 GMT


X-Trade Brokers Dom Maklerski SA | Robert.kosowski@xtb.pl; 00-876 Warszawa
http://www.xtb.com/ | Robert.kosowski@xtb.pl

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