UBS Raises USD/PLN Forecast Amid Trump’s Potential Impact
Zurich – UBS, a leading global financial services firm, has revised its USD/PLN forecast upwards, citing the potential impact of former US President Donald Trump’s possible return to the White House in 2024. The Swiss bank now sees the Polish zloty weakening against the US dollar, driven by concerns over Trump’s unpredictable foreign policy stance and the potential for increased global trade tensions should he be re-elected. This revised outlook reflects growing unease among investors about the prospective implications of a second Trump presidency on international markets, particularly in emerging economies like Poland. The zloty’s susceptibility to external shocks, coupled with the perceived risk aversion a Trump administration might engender, contributes significantly to UBS’s adjusted projections.
The upward revision in the USD/PLN forecast comes as Trump gains momentum in the Republican presidential primary race. His resurgence has sparked renewed debate about his previous administration’s trade policies, marked by protectionist measures and frequent disputes with international partners. These policies, which often targeted specific countries and industries, created considerable volatility in global markets. Analysts at UBS highlight the uncertainty surrounding Trump’s potential future trade strategies and the possibility of a return to such disruptive policies as a key factor influencing their revised forecast for the Polish zloty. Concerns exist that a resurgence of protectionist sentiment under a Trump administration could disproportionately impact export-oriented economies like Poland, leading to currency depreciation.
Beyond trade policy, UBS also points to the broader geopolitical uncertainty associated with a potential Trump presidency as a contributing factor to the zloty’s projected weakness. Trump’s "America First" approach to foreign policy, often characterized by unilateral actions and a disregard for established international norms, has raised concerns about increased global instability. This uncertainty could prompt investors to seek safer havens, putting downward pressure on currencies perceived as more vulnerable, such as the zloty. Furthermore, UBS analysts believe a Trump presidency could exacerbate existing geopolitical tensions, potentially leading to greater market volatility and further weakening the Polish currency.
The Polish zloty, while demonstrating resilience in recent years, remains susceptible to external pressures, particularly shifts in global investor sentiment and US political developments. Poland’s close economic ties with the Eurozone, combined with its reliance on exports, make it vulnerable to fluctuations in global trade and investment flows. A potential resurgence of protectionist policies under a Trump administration could negatively impact Poland’s export sector, leading to a decline in economic growth and further downward pressure on the zloty. Moreover, the zloty’s sensitivity to global risk aversion makes it particularly vulnerable to the heightened uncertainty associated with a potential Trump return to the White House.
UBS’s revised USD/PLN forecast underscores the growing concerns among financial institutions regarding the potential economic and geopolitical ramifications of a second Trump presidency. While the forecast represents a specific outlook for the Polish zloty, it reflects a broader apprehension about the impact of a potential Trump administration on emerging markets and the global economy. The uncertainty surrounding Trump’s policy positions, particularly in areas like trade and foreign policy, is contributing to increased market volatility and prompting investors to reassess their risk exposure in various currencies and asset classes.
The revised forecast also highlights the interconnectedness of global markets and the ripple effects of US political developments on economies worldwide. The potential return of Trump to the presidency is being closely watched by investors and policymakers globally, as it could have significant consequences for international trade, geopolitical stability, and currency markets. The evolving political landscape in the US and the associated uncertainty will likely continue to influence currency forecasts and investment strategies in the months and years ahead. The Polish zloty, as a barometer of investor sentiment towards emerging markets, will likely remain sensitive to developments in the US political arena, particularly as the 2024 presidential election draws nearer. UBS’s revised forecast serves as a reminder of the potential for political events to impact financial markets and the importance of considering such risks in investment decisions.
