The European economy is sending highly mixed signals to the markets, and the slump in German consumer sentiment is a clear warning sign for the local export-oriented industry. On the currency market, however, the Polish zloty is showing great resilience, giving domestic importers and exporters valuable room to calmly and precisely hedge their trade margins against upcoming volatility.
German consumers tighten their belts as inflation slows
Yesterday’s data from Europe’s largest economy does not inspire optimism. Although German GDP recorded a symbolic increase of 0.3% quarter-on-quarter, the GfK consumer climate index brutally brought the markets down to earth, falling to -24.7 points. The German consumer is clearly concerned about the rising cost of living and economic uncertainty. For Polish enterprises, especially in the furniture, automotive, or home appliance sectors, this means the specter of declining orders in the perspective of the next two quarters.
From a monetary policy perspective, the European Central Bank found itself in a very uncomfortable position. The headline consumer inflation (CPI) for the eurozone fell yesterday to 1.7% year-on-year, which theoretically opens the door to bolder interest rate cuts. The problem, however, is core inflation. The Core CPI, excluding the most volatile energy and food prices, stubbornly remains at 2.2%. The services sector is still generating price pressure. This morning’s speech by ECB President Christine Lagarde did not bring a breakthrough, and markets are still pricing in a cautious approach to policy easing in Europe.
In Asian markets, on the other hand, we are seeing a completely different dynamic. The Japanese core inflation indicator (BoJ Core CPI) fell to 1.7% from the previous 1.9%, cooling expectations for a rapid policy tightening by the Bank of Japan, hitting the yen, and forcing investors to revise their carry trade strategies.
Oil market shock and waiting for Wall Street
The situation on the commodity markets is dominated by yesterday’s absolutely massive data on US crude oil inventories. The EIA report showed a gigantic inventory increase of 15.989 million barrels, while forecasts assumed an increase of only 1.8 million. Such a drastic supply shock pushed Brent crude prices down to around 70.58 USD per barrel. For companies in the TFL (Transport, Forwarding, Logistics) sector, this is excellent news, meaning a drop in operational costs at the beginning of the year.
old once again proves its status as a safe haven in times of macroeconomic uncertainty. The bullion remains at historically high levels, around 5178 USD per ounce. Investors are clearly fleeing from risk, positioning themselves for possible interest rate cuts by the US Fed.
Major stock indices are showing cautious optimism. The German DAX (DE30) is consolidating around 25,155 points after a recent downward wave. Across the ocean, the American Dow Jones (US30) is bouncing back towards 49,438 points. Markets are clearly catching their breath before the key data from the US labor market, which we will find out this afternoon.
Currency Dashboard (as of 10:10)
- EUR/PLN: 4.2202 ↗️ | A slight rebound from local lows gives exporters a brief window to exchange currency at a slightly better rate.
- USD/PLN: 3.5760 ↘️ | The US currency remains under pressure, providing an excellent opportunity for importers bringing in goods from Asia and the US.
- EUR/USD: 1.1800 ↗️ | The main currency pair is bouncing back after yesterday’s sell-off; markets are digesting European inflation data and waiting for the Wall Street opening.
- CHF/PLN: 4.6234 ➖ | The Swiss franc is in a flat consolidation, which favors budget planning for companies handling leasing installments in this currency.
- GBP/PLN: 4.8370 ↘️ | The British currency is in a downward trend following yesterday’s turmoil, making purchases from UK contractors easier and cheaper.
- OILBRNT: 70.58 ↘️ | The massive increase in US inventories is pushing black gold prices down.
Thursday’s Calendar: Eyes on the US labor marke
Today’s European session has already brought data on M3 money supply in the eurozone, which grew by 3.3% year-on-year, beating forecasts. Looking ahead to afternoon volatility, market attention shifts entirely across the ocean.
At 14:30 (CET), we will see the weekly report on initial jobless claims in the US. Any deviation from the consensus (estimated at 217,000) will indicate the direction for the US dollar. Weaker labor market data could push the USD lower, providing another impulse for the strengthening of the Polish zloty. At 16:00, a speech by FOMC member Michelle Bowman is scheduled, which may shed more light on the Fed’s intentions ahead of its next meeting.
Protecting margins is a priority. Don’t leave currency exchange to chance
Market volatility, driven by surprising macroeconomic data and shifts in central bank policies, is the daily reality of every CFO and business owner. A lack of control and predictability in international finance is the main reason for losses on exchange rate differences. Many entrepreneurs still execute foreign transfers in a reactive model – accepting the rate imposed by the bank at the moment of ordering the payment.
When operating globally, operational cost optimization is the foundation of a company’s security. The Trejdoo platform gives immediate access to favorable exchange rates in 16 major currencies, including EUR, USD, CHF, GBP, or Scandinavian crowns. When transaction amounts grow, every fraction of a cent has a colossal impact on the final profit. Instead of accepting wide bank spreads, strict rules of the game should be applied to larger orders. The gold standard in such situations is the direct negotiation of exchange rates with a dealer, which allows cutting unnecessary intermediary costs and securing the target margin written in the trade contract.
Additionally, the use of pending orders on the platform takes the burden of constantly monitoring charts off the entrepreneur’s shoulders. The system will automatically execute the exchange exactly when the market reaches your desired level. In business, there is no room for guesswork and unpredictability. Check in advance exactly how much your transfer or exchange will cost using our currency calculator, and stop overpaying for basic financial operations.
The goal of consciously running a business in a multi-currency environment is not speculating on financial markets, but the ironclad protection of the generated trade margin. By securing the appropriate rate in advance and limiting hidden costs in spreads, you build your company’s competitive advantage in international markets, regardless of whether the German consumer is buying more or less.
This material, prepared by Igoria Trade S.A., is for educational and informational purposes only and does not constitute an offer, recommendation, or investment advice. The data comes from sources deemed reliable; however, Igoria Trade S.A. does not guarantee its full accuracy. Interpretations of charts and comments reflect the subjective assessment of the authors. Users should conduct their own analysis before making any investment decisions. Igoria Trade S.A. bears no responsibility for the consequences of actions based on the information contained herein. Use or publication of all or part of this material without the written consent of Igoria Trade S.A. is prohibited.
PLN stable despite falling inflation in Europe. What does the weak German consumer mean for Polish exports?
The European economy is sending highly mixed signals to the markets, and the slump in German consumer sentiment is a clear warning sign for the local export-oriented industry. On the currency market, however, the Polish zloty is showing great resilience, giving domestic importers and exporters valuable room to calmly and precisely hedge their trade margins against upcoming volatility.
German consumers tighten their belts as inflation slows
Yesterday’s data from Europe’s largest economy does not inspire optimism. Although German GDP recorded a symbolic increase of 0.3% quarter-on-quarter, the GfK consumer climate index brutally brought the markets down to earth, falling to -24.7 points. The German consumer is clearly concerned about the rising cost of living and economic uncertainty. For Polish enterprises, especially in the furniture, automotive, or home appliance sectors, this means the specter of declining orders in the perspective of the next two quarters.
From a monetary policy perspective, the European Central Bank found itself in a very uncomfortable position. The headline consumer inflation (CPI) for the eurozone fell yesterday to 1.7% year-on-year, which theoretically opens the door to bolder interest rate cuts. The problem, however, is core inflation. The Core CPI, excluding the most volatile energy and food prices, stubbornly remains at 2.2%. The services sector is still generating price pressure. This morning’s speech by ECB President Christine Lagarde did not bring a breakthrough, and markets are still pricing in a cautious approach to policy easing in Europe.
In Asian markets, on the other hand, we are seeing a completely different dynamic. The Japanese core inflation indicator (BoJ Core CPI) fell to 1.7% from the previous 1.9%, cooling expectations for a rapid policy tightening by the Bank of Japan, hitting the yen, and forcing investors to revise their carry trade strategies.
Oil market shock and waiting for Wall Street
The situation on the commodity markets is dominated by yesterday’s absolutely massive data on US crude oil inventories. The EIA report showed a gigantic inventory increase of 15.989 million barrels, while forecasts assumed an increase of only 1.8 million. Such a drastic supply shock pushed Brent crude prices down to around 70.58 USD per barrel. For companies in the TFL (Transport, Forwarding, Logistics) sector, this is excellent news, meaning a drop in operational costs at the beginning of the year.
old once again proves its status as a safe haven in times of macroeconomic uncertainty. The bullion remains at historically high levels, around 5178 USD per ounce. Investors are clearly fleeing from risk, positioning themselves for possible interest rate cuts by the US Fed.
Major stock indices are showing cautious optimism. The German DAX (DE30) is consolidating around 25,155 points after a recent downward wave. Across the ocean, the American Dow Jones (US30) is bouncing back towards 49,438 points. Markets are clearly catching their breath before the key data from the US labor market, which we will find out this afternoon.
Currency Dashboard (as of 10:10)
Thursday’s Calendar: Eyes on the US labor marke
Today’s European session has already brought data on M3 money supply in the eurozone, which grew by 3.3% year-on-year, beating forecasts. Looking ahead to afternoon volatility, market attention shifts entirely across the ocean.
At 14:30 (CET), we will see the weekly report on initial jobless claims in the US. Any deviation from the consensus (estimated at 217,000) will indicate the direction for the US dollar. Weaker labor market data could push the USD lower, providing another impulse for the strengthening of the Polish zloty. At 16:00, a speech by FOMC member Michelle Bowman is scheduled, which may shed more light on the Fed’s intentions ahead of its next meeting.
Protecting margins is a priority. Don’t leave currency exchange to chance
Market volatility, driven by surprising macroeconomic data and shifts in central bank policies, is the daily reality of every CFO and business owner. A lack of control and predictability in international finance is the main reason for losses on exchange rate differences. Many entrepreneurs still execute foreign transfers in a reactive model – accepting the rate imposed by the bank at the moment of ordering the payment.
When operating globally, operational cost optimization is the foundation of a company’s security. The Trejdoo platform gives immediate access to favorable exchange rates in 16 major currencies, including EUR, USD, CHF, GBP, or Scandinavian crowns. When transaction amounts grow, every fraction of a cent has a colossal impact on the final profit. Instead of accepting wide bank spreads, strict rules of the game should be applied to larger orders. The gold standard in such situations is the direct negotiation of exchange rates with a dealer, which allows cutting unnecessary intermediary costs and securing the target margin written in the trade contract.
Additionally, the use of pending orders on the platform takes the burden of constantly monitoring charts off the entrepreneur’s shoulders. The system will automatically execute the exchange exactly when the market reaches your desired level. In business, there is no room for guesswork and unpredictability. Check in advance exactly how much your transfer or exchange will cost using our currency calculator, and stop overpaying for basic financial operations.
The goal of consciously running a business in a multi-currency environment is not speculating on financial markets, but the ironclad protection of the generated trade margin. By securing the appropriate rate in advance and limiting hidden costs in spreads, you build your company’s competitive advantage in international markets, regardless of whether the German consumer is buying more or less.
This material, prepared by Igoria Trade S.A., is for educational and informational purposes only and does not constitute an offer, recommendation, or investment advice. The data comes from sources deemed reliable; however, Igoria Trade S.A. does not guarantee its full accuracy. Interpretations of charts and comments reflect the subjective assessment of the authors. Users should conduct their own analysis before making any investment decisions. Igoria Trade S.A. bears no responsibility for the consequences of actions based on the information contained herein. Use or publication of all or part of this material without the written consent of Igoria Trade S.A. is prohibited.Share this