UBS revised its quarter-end forecasts for the US greenback in opposition to the Polish zloty (), citing a variety of things together with the potential challenges Europe and Poland could face from Donald Trump’s doable second presidency, strong US financial information, and lackluster European figures.
The brand new projections see a rise to 4.35 for the primary quarter of 2025, up from 4.14, and subsequent quarters present related upward changes.
The Swiss monetary providers firm anticipates that the US addressing its excessive fiscal deficits and a diminishing of Europe’s destructive elements might finally result in a reversal of the current USD good points. UBS additionally famous the sturdy efficiency of the US greenback following Trump’s election, pushed by growth-supportive elements of his agenda, potential inflationary impacts, and steady sturdy US financial information.
The US administration’s commerce insurance policies might initially add to the enchantment of the US greenback as nicely. Nevertheless, UBS expects that market focus will finally shift to elements of Trump’s agenda that might negatively have an effect on the US greenback, corresponding to excessive fiscal deficits and the repercussions of tariffs on US development. Poland, whereas having restricted direct commerce publicity to the US, is built-in into the broader European financial system and may very well be affected by a discount in US help and a possible lower in dedication to NATO.
When it comes to financial outlook, UBS forecasts Poland’s actual GDP development to be round 3% year-on-year in 2024, with an anticipated acceleration to three.5% in 2025 as a consequence of important EU funds. The fiscal deficit is projected to stay vast, with dangers of slippage throughout an election yr. Poland’s financial coverage has maintained the coverage fee at 5.75% in January, with the Nationwide Financial institution of Poland (NBP) signaling potential inflation persistence as a consequence of vitality costs.
Waiting for the Polish presidential election, the primary spherical is scheduled for Might 18. The end result might affect the zloty, with a victory by Civic Platform’s candidate Rafal Trzaskowski anticipated to facilitate the passage of key laws, probably bolstering the forex. Conversely, a win by Legislation and Justice backed candidate Karol Nawrocki might result in legislative gridlock, probably dampening sentiment.
UBS additionally cautions that continued US financial energy and inflation not aligning with targets could lead the Federal Reserve to reassess its rate-cutting trajectory, which might help the greenback for an prolonged interval.
Moreover, aggressive commerce tariffs by the US could initially profit the buck, presumably pushing USDPLN above the 4.40 stage. Conversely, efficient absorption of EU funds or an on-market change of those funds amid moderating US exercise might help the zloty.
This text was generated with the help of AI and reviewed by an editor. For extra data see our T&C.
