Interesting how things are developing. Not too long ago, I probably would have agreed with my Polish neighbor when he told me I should be pessimistic about the zloty. But now, mid-2026, the situation looks different. The Polish zloty has performed impressively against the euro in recent months, and that’s no coincidence.

Let me briefly explain why the EUR-PLN currency pair has suddenly become so much more interesting. Poland has been a member of the EU since 2004 but has kept its zloty — which is perfect for active forex traders like me. Currently, you can get about 4.27 zloty for one euro, and that’s exactly where things get exciting.

The chart shows something fascinating: after the euro initially rose sharply at the start of the war in Ukraine, it fell continuously for three years. Then came 2025 — the euro started to appreciate again. This indicates a possible trend reversal, especially since the rate has bounced off a significant low several times.

What’s behind this? Let’s look at the hard facts. Poland’s key interest rate is at 4.75 percent, while the eurozone is only at 2.0 percent. That’s a big difference, and higher interest rates attract investors, boosting demand for the zloty. At the same time, Poland’s economy is growing with a projected 3.5 percent — significantly stronger than the eurozone’s modest 1.2 percent. Poland’s unemployment rate is at 3.1 percent, while in the eurozone it’s at 6.2 percent.

But there are also counterarguments. Inflation in Poland was 3.7 percent in 2024, higher than the eurozone’s 2.4 percent. And Poland’s public debt increased significantly in 2025 — by the second quarter, it exceeded 416 billion euros. That’s an upward trend that cannot be ignored.

Then there’s the geopolitical situation. Poland borders Ukraine and Belarus directly. Military spending has been ramped up, and millions of Ukrainian refugees need to be supported. This strains the budgets, even though the employment rate among Ukrainian refugees of working age is nearly 70 percent.

For the second half of 2026, I see the EUR-PLN currency pair moving sideways, with slight upward pressure. Analysts are divided — some expect values around 4.20 zloty per euro, others forecast up to 4.44. Erste Group estimates about 4.30. My assessment? The pair remains volatile but interesting.

Anyone trading zloty, dollar, or other currencies should note: the daily ranges aren’t particularly large, allowing for relaxed trading. During sideways movements, you can go long at lows and either exit at the next high in the short term or bet on a trend reversal in the long term. For carry-trade strategies, this pair is also interesting due to the interest rate differential between Poland and the eurozone.

My conclusion: the zloty isn’t as weak as my pessimistic neighbor thought. There are good reasons for further appreciation. But with rising inflation and geopolitical risks, caution is advised. The EUR-PLN pair offers interesting setups for active traders willing to manage volatility. And honestly — there’s still interesting conversation material with Polish friends when talking about their currency.