US LNG exports surge but will buyers in China turn up?
UBS updated its Polish zloty outlook, citing Germany’s planned increase in defense and infrastructure spending as a positive influence on the European growth outlook and, consequently, on the zloty’s performance against the US dollar.
The Swiss financial services firm indicated that these developments, along with the potential benefits from a ceasefire in Ukraine, have bolstered sentiment towards European currencies in recent months.
However, UBS also noted that the imposition of tariffs could lead to near-term weakness for the zloty against the US dollar. The firm outlined key risks that could drive a longer-term downside in the USD/PLN exchange rate, including high lasting tariffs, renewed strength in US economic data, higher-than-expected inflation, and the potential failure of ceasefire negotiations or further advances by Russia in Ukraine.
In light of these considerations, UBS has updated its forecast for the USD/PLN exchange rate. The new end-of-quarter forecasts now stand at 3.96, 3.89, 3.80, and 3.71 for 2Q through 1Q26. These figures are adjusted from the previous forecasts of 4.12, 4.09, 4.06, and 4.02, respectively, indicating a more favorable outlook for the Polish currency against the dollar.
Additionally, UBS has revised its quarter-end forecasts for the EUR/PLN exchange rate, reflecting improved medium-term prospects for the European economy. The updated forecasts are now set at 4.20 for 2Q25, remaining unchanged, but have been lowered to 4.20 for 3Q25 (from 4.25), 4.18 for 4Q25 (from 4.30), and 4.16 for 1Q26 (from 4.30), suggesting a stronger zloty against the euro towards the end of the forecast horizon.
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