Euro is the official currency of the EU, which is used by 19 countries of the Commonwealth. This determines the exciting economic features of the money. First of all, this concerns the mechanisms for forming EUR cross quotes.
Most people, even without an economic education, understand that the strength of currency directly depends on the economy. If we talk about a single country, then everything is more or less clear.
The GDP, the level of employment and unemployment, changes in external debt, consumer expectations indices, and inflation are taken into account. But the Euro is not so simple.
Historically, some of the participating countries switched to the capitalist model of the economy much earlier than the rest of the Commonwealth.
This determined the factor that Germany, France, Italy are the most significant drivers of euro fluctuations. It is the economy of these countries that directly determines changes in currency quotes.
At the same time, the budget deficit of Eastern European countries leads to the fact that developed donors are forced to inject capital, not in their production, but their immediate neighbors.
As a result, this led to the development of an economic crisis that has swept Europe since 2016. As a result, the EU economy in 2019 showed almost zero growth, which is a clear sign of a deep financial depression.
Against this background, the European Central Bank is forced to take desperate measures, which sometimes run counter to the expectations of experts or even common sense.
All this is because previously, unpopular trading pairs cause more and more interest from traders. This also applies to the EUR/PLN instrument.
Since Poland retained the national currency, its economy is not so much tied to the EU, although it directly depends on trade relations with the Eurozone.
Nevertheless, the country actively is developed and frequently shows good economic results that are created specific volatiles on the market, and it opens the commercial corridor for the traders.
Polish zloty relates to the weak currencies. In Poland, there are neither large mineral deposits nor its oil or gas. The tourism and light industry is relatively developed.
In this situation, the GDP Gross Domestic Product of the country on 90%, it depends on the demand for consumer goods and export food products. Therefore for the zloty are characteristic of the essential points, which can exceed 1000 points.
The second crucial point, the country from 2015 the year continually reduced its gold hoards. The situation changed only in the second calendar quarter 2019 when the Central Bank stocked up more than 100 tons of precious metal.
Traders perceived this as a claim for an increase in the economy of the country and an attempt to strengthen the positions of zloty in the period of the unstable economic situation in the European Union. The currency was increased concerning the Euro-.
But entire this it is small to speak, that PLN it is capable of the equal to compete with EUR. The main reason lies in the fact that almost 30% of the GDP Gross Domestic Product of Poland – these are the incomes, obtained from Germany. The FRG is considered as the most important commercial partner of the country, and it strongly influences its business successes.
The considerable growth retardation in the economy of Germany expected led to the fact that the zloty continues to weaken against the background by Euro-. But the trader needs to understand that this volatility is entirely predictable.
To know when to enter the market, it is recommended to follow the decisions of the ECB and the German Central Bank, the economic performance of Germany and the light industry market.
Together, these factors determine the ratio in the EUR/PLN cross. It is quite apparent that in the current situation, the zloty will continue to fall in price against the Euro. But this will happen in waves.
Therefore, traders are advised to open long-term positions. In this case, the probability of getting the right margin is much higher. Scalping on a pair is also possible, but incomes will be meager. This format is not relevant for EUR/PLN.