Rising geopolitical risk and Poland’s 2027 budget
In the latest AFORTI.BIZ Market Report, we summarise the developments that affected the zloty, the dollar, oil and sentiment across global markets over the past week. Investor sentiment was driven primarily by the unexpected visit of the CIA Director to Moscow, Nvidia’s exceptional financial results fuelling the technology rally, and the adoption of Poland’s draft 2027 budget with a record-high deficit. Read on to find out what this could mean for businesses settling transactions in foreign currencies.
Key takeaways
- The zloty weakened markedly against the euro, dollar and pound sterling (EUR/PLN rose by 0.68% and USD/PLN by 1.54%) following a sharp increase in geopolitical tensions in the region.
- The dollar gained amid a global rise in risk aversion and hawkish market expectations ahead of the Fed Chair’s speech at Jackson Hole.
- Polish debt market under pressure – the government’s adoption of a draft budget with a deficit of PLN 282.6 billion pushed yields on Polish ten-year government bonds close to 6%.
Economic indicators
Poland
- Retail sales y/y (July): actual 5.3%; forecast 4.5%; previous 6.8%;
- M3 money supply y/y (July): actual 11.3%; forecast 11.6%; previous 11.8%;
- Unemployment rate (July): actual 5.8%; forecast 5.8%; previous 5.8%;
Eurozone
- M3 money supply y/y (July): actual 3.4%; forecast 3.5%; previous 3.3%;
- Consumer confidence index (August): actual -15.5; forecast -15.5; previous -15.9;
- Business and consumer survey (August): actual 98.4; forecast 97.5; previous 97.1;
- Services sentiment indicator (August): actual 5.8; forecast 4.9; previous 5.1;
- Loans to the private sector y/y (July): actual 3.1%; forecast 2.9%; previous 3.0%;
Germany
- German GDP q/q (Q2): actual 0.3%; forecast 0.2%; previous 0.4%;
- German GDP y/y (Q2): actual 1.0%; forecast 0.9%; previous 0.7%;
- German Ifo business climate index (August): actual 88.8; forecast 87.2; previous 86.7;
- German unemployment rate (August): actual 6.4%; forecast 6.4%; previous 6.4%;
- German unemployment change (August): actual 4K; forecast 4K; previous 6K;
United Kingdom
- CBI distributive trades survey (August): actual -48; forecast -35; previous -26;
USA
- Building permits (July): actual 1.433M; forecast 1.443M; previous 1.374M;
- Conference Board consumer confidence index (August): actual 89.4; forecast 90.3; previous 90.2;
- New home sales (July): actual 607K; forecast 620K; previous 678K;
- Core personal consumption expenditure (PCE) price index y/y (July): actual 3.3%; forecast 3.3%; previous 3.3%;
- GDP q/q (Q2): actual 1.5%; forecast 1.5%; previous 2.1%;
China
- Chinese industrial profits, YTD (July): actual 17.6%; forecast -; previous 18.7%;
Currency market
Over the week, the euro (EUR) strengthened against the zloty (PLN) by 0.68%. The euro traded in a range of 4.2939–4.3463.
(source: www.money.pl)
The dollar (USD) strengthened against the zloty (PLN) by 1.54%. The dollar traded in a range of 3.6793–3.7548.
(source: www.money.pl)
The pound sterling (GBP) strengthened against the zloty (PLN) by 0.76%. The pound traded in a range of 5.0135–5.0825.
(source: www.money.pl)
Commodities market
Brent crude fell by 6.06%. The price traded in a range of USD 84.76–93.09 per barrel.
(source: www.money.pl)
Gold also fell by 3.38%. The price of gold traded in a range of USD 4,501.05–4,750.30 per ounce.
(source: www.money.pl)
Equity market
The WIG index rose by 0.2%. The index traded in a range of 150,665–153,861.
(source: www.money.pl)
What does this mean for businesses?
- Importers: The weaker zloty increases the cost of foreign purchases, requiring companies that import goods to manage their exchange rate risk actively.
- Exporters: Higher foreign currency exchange rates significantly improve the profitability of Polish companies’ overseas sales following several weeks of a strong zloty.
- Businesses seeking financing: The record budget deficit and government bond yields close to 6% mean that the market cost of raising capital will remain high.
What drove the markets?
CIA Director in Moscow
The unexpected visit of CIA Director John Ratcliffe to Moscow caused geopolitical concern. Media reports revealed warnings of possible aggression against the Baltic states. These reports weakened the zloty and triggered a sell-off on the Warsaw Stock Exchange, where the WIG20 index lost 1.94% on Thursday. Investors are concerned about destabilisation in the region, which led to a sudden outflow of capital.
Jackson Hole speech
The annual Jackson Hole symposium and Fed Chair Kevin Warsh’s speech attracted the markets’ attention. Investors were looking for guidance on interest rates amid persistent inflation in the USA. July’s PCE reading of 3.7% y/y and core PCE of 3.3% y/y confirm strong price pressure. Weakening consumer spending is further complicating the situation.
Oil price correction
Oil prices recorded a correction of more than 5%. Brent crude fell to USD 89.66 per barrel, while WTI declined to USD 83.21. The lower geopolitical risk premium reflects the US strategy of relying on sanctions in its approach towards Iran. Cheaper crude is temporarily easing global inflation concerns.
Adoption of Poland’s draft 2027 budget
The government adopted the draft budget for 2027. It provides for a record deficit of PLN 282.6 billion and borrowing requirements of PLN 565 billion. Debt-servicing costs are expected to reach PLN 107 billion. Fitch affirmed Poland’s A- rating with a negative outlook, pushing ten-year government bond yields close to 6%.
What to watch this week?
Zloty (PLN)
Investors will focus on Monday’s releases of Poland’s second-quarter GDP and preliminary CPI inflation for August. Tuesday’s manufacturing PMI and Wednesday’s interest rate decision by Poland’s Monetary Policy Council will also be key for the zloty. The policy rate currently stands at 3.75%.
Euro (EUR)
The euro will be influenced by Monday’s German inflation data and Tuesday’s preliminary Eurozone HICP reading, with the consensus pointing to an acceleration to 3.3% y/y. Thursday’s final services PMI readings will also be an important test.
Dollar (USD)
Tuesday’s ISM manufacturing reading and Wednesday’s ADP report and Federal Reserve Beige Book will set the direction for the dollar. The key event of the week will be Friday’s US nonfarm payrolls report for August, with employment forecast to rise by 58,000.
Pound sterling (GBP)
Tuesday’s Nationwide House Price Index will be the key release for the British currency, with a forecast of 2.0% y/y. Thursday’s final services PMI reading, forecast at 52.8 points, will also be important.
Treasury Department | AFORTI.BIZ
Planning a business payment in US dollars? Check the current USD/PLN exchange rate and exchange currency on the AFORTI.BIZ platform.
Data as of: 31 August 2026