Market Report / Strong zloty, hawkish Fed pause and escalation in the Middle East

In the latest AFORTI.BIZ Market Report, we summarise the events that affected currency and commodity prices and global investor sentiment over the past week. The market’s attention focused primarily on the marked strengthening of the Polish zloty, the US Federal Reserve’s hawkish pause, which pushed bond yields higher, the further escalation of tensions in the Middle East, and the spectacular rebound in technology stock valuations after the earlier sell-off. Find out what this could mean for your company’s finances and liquidity.

Key takeaways

Zloty strengthens: The Polish zloty gained markedly against the dollar and the euro, supported by strong gains on the Warsaw Stock Exchange.
Hawkish signal from the Fed: The absence of any indication of interest rate cuts in the USA led to a sharp jump in US Treasury yields.
Geopolitical tensions: Saudi Arabia’s direct involvement in the conflict is sustaining market risk and high volatility in oil prices.

Economic indicators

Poland

CPI (y/y) (July): actual 3.0%; forecast 3.0%; previous 2.5%;
CPI (m/m) (July): actual 0.8%; forecast 0.8%; previous -0.5%;

Eurozone

CPI (y/y) (July): actual 2.9%; forecast 2.9%; previous 2.8%;
Core CPI (y/y) (July): actual 2.5%; forecast 2.4%; previous 2.4%;
Unemployment rate (June): actual 6.3%; forecast 6.2%; previous 6.3%;
Business and consumer survey (July): actual 96.9; forecast 96.0; previous 95.4;
CPI (m/m) (July): actual 0.2%; previous -0.1%;

Germany

Ifo business climate index (July): actual 86.6; forecast 86.1; previous 85.7;
GDP (q/q) (Q2): actual 0.2%; forecast 0.1%; previous 0.3%;
GDP (y/y) (Q2): actual 0.9%; forecast 0.6%; previous 0.4%;
CPI (y/y) (July): actual 2.8%; forecast 2.7%; previous 2.3%;
Unemployment rate (July): actual 6.4%; forecast 6.3%; previous 6.3%;

United Kingdom

Interest rate decision (July): actual 3.75%; forecast 3.75%; previous 3.75%;
Nationwide social poverty index (y/y) (July): actual 1.8%; forecast 1.9%; previous 2.2%;
M4 money supply (m/m) (June): actual 0.8%; forecast 0.2%; previous 0.1%;
Mortgage lending (June): actual 7.73B; forecast 3.95B; previous 3.27B;

USA

GDP (q/q) (Q2): actual 1.5%; forecast 2.1%; previous 2.1%;
Interest rate decision: actual 3.75%; forecast 3.75%; previous 3.75%;
Initial jobless claims: actual 197K; forecast 201K; previous 189K;
Core Personal Consumption Expenditures Price Index (Core PCE) (y/y) (June): actual 3.3%; forecast 3.3%; previous 3.4%;
Core Personal Consumption Expenditures Price Index (PCE) (m/m) (June): actual 0.1%; forecast 0.2%; previous 0.3%;

China

Manufacturing PMI (July): actual 49.2; forecast 50.1; previous 50.3;
Services PMI (July): actual 49.0; forecast 50.0; previous 50.2;
China Composite PMI (July): actual 49.3; previous 50.8;
Industrial profits in China, YTD (June): actual 18.7%; previous 18.8%;

Currency market

This week, the euro (EUR) weakened by 0.18% against the Polish zloty (PLN). The euro traded between 4.3030 and 4.3339.

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(source: www.money.pl)

Meanwhile, the US dollar (USD) weakened by 1.63% against the Polish zloty (PLN). The dollar traded between 3.7276 and 3.8113.

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(source: www.money.pl)

Pound sterling (GBP) weakened by 0.51% against the Polish zloty (PLN). The pound traded between 5.0160 and 5.0616.

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(source: www.money.pl)

Commodities market

Brent crude fell by 8.33%. It traded between USD 82.66 and USD 96.78 per barrel.

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(source: www.money.pl)

Meanwhile, gold rose by 1.13%. It traded between USD 4,011.20 and USD 4,177.30 per ounce.

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(source: www.money.pl)

Equity market

The WIG index rose by 2.66%. The index traded between 143,722 and 147,460.

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(source: www.money.pl)

What does this mean for businesses?

Importers: A stronger zloty lowers the cost of foreign purchases, creating a favourable window for settling FX transactions.
Exporters: The decline in USD and EUR exchange rates reduces the profitability of foreign sales when revenue is converted into PLN.
IT sector: Sustained demand for cloud services supports the case for further investment in process digitalisation.
Financial markets and banks: Higher bond yields increase the cost of borrowing but support the banking sector’s net interest income.

What moved the markets?

Hawkish signal from the Fed

The Federal Reserve kept interest rates within the 3.50–3.75% range. The decision was approved by a 9–3 vote, with three members dissenting in favour of tighter monetary policy. The absence of any indication of rate cuts and Kevin Warsh’s hawkish message created uncertainty among investors. Yields on 10-year US Treasuries rose to nearly 4.7%, while 30-year yields reached 5.2%, putting significant pressure on the debt market.

Escalation in the Middle East

The Saudi air force, acting in coordination with US forces, carried out strikes on targets in seven Iranian provinces. The operation was launched in response to drone attacks on Aramco refineries and blockades of the strategic Strait of Hormuz and Bab al-Mandab Strait. The collapse in Saudi oil exports is sustaining high volatility in oil prices and intensifying concerns about a renewed rise in global inflation.

Zloty strengthens

The Polish zloty had a strong week, gaining markedly against major currencies. USD/PLN fell by nearly 1.9% to the 3.73–3.74 range, while EUR/PLN declined to 4.30. The zloty was supported by the global weakening of the dollar and gains on the Warsaw Stock Exchange, where the WIG20 index rose above 3,900 points, led by the banking sector. July’s CPI reading of 3.0% y/y was in line with market expectations.

Big Tech volatility

The technology sector experienced extreme volatility. After falling by 17.2% over three days, South Korea’s KOSPI index gained 17.9% in a single session in response to the results of AI companies. In the USA, Microsoft recorded a sharp increase in its valuation following a 43% y/y rise in Azure revenue. Meta Platforms, meanwhile, came under pressure due to rising capital expenditure.

What to watch this week?

Polish zloty (PLN)

On Monday, 3 August, the zloty will react to the release of Poland’s manufacturing PMI. Another key event for investors will be Friday’s release, on 7 August, of data on the National Bank of Poland’s foreign exchange reserves.

Euro (EUR)

Monday’s manufacturing PMI readings on 3 August and Wednesday’s services index on 5 August will be key for the euro. On Thursday, 6 August, the market’s attention will turn to the release of Eurozone retail sales data.

US dollar (USD)

The dollar will be influenced by Monday’s ISM manufacturing index on 3 August and Wednesday’s services reading on 5 August. The most important event for the US currency, however, will be Friday’s official labour market report on 7 August.

Pound sterling (GBP)

Pound sterling volatility will be influenced by Monday’s manufacturing PMI release on 3 August and Wednesday’s services reading on 5 August. The week will end with Friday’s analysis of the Halifax house price report on 7 August.

Treasury Department | AFORTI.BIZ

A stronger zloty changes the FX landscape for importers and exporters. Check rates on AFORTI.BIZ – exchange currency now or lock in an exchange rate in advance with Term.

Data as of: 3 August 2026