Just talked with my Polish neighbor about currency trading, and he immediately said: "Stay away from the Złoty, that's not going to work." His concerns are understandable – the government, the war in neighboring Ukraine. But as someone who deals with markets, I wanted to look into it more closely. So I checked out the EUR/PLN and also found interesting parallels to the CHF/PLN.

What surprised me: The current rate is about 4.27 PLN per euro. Historically, it’s always been around the 4 mark, but in the last three years, the euro has actually depreciated against the Złoty. Only since March of this year do we see small appreciations of the euro again. That may indicate a trend reversal. So my neighbor could be wrong.

When I look at the fundamentals, it gets interesting: Poland currently has a key interest rate of 4.75%, while the Eurozone only 2.0%. That’s a big difference. Plus, Poland’s economy is expected to grow by 3.5%, significantly stronger than the Eurozone’s projected 1.2% for 2025. The unemployment rate in Poland is 3.1%, in the Eurozone 6.2%. That actually favors a stronger Złoty.

On the other hand: Inflation in Poland is still at 3.6% for 2025, while in the Eurozone it’s falling to 2.1%. And Poland’s national debt has recently increased significantly – over 416 billion euros by Q2 2025. That could weigh on the Złoty.

For those interested in currency pairs, they should also keep an eye on CHF/PLN. The Swiss franc is a different league than the euro, which can be interesting for traders with diversified portfolios. The volatility of EUR/PLN is moderate, allowing for more relaxed trading.

Analysts are divided on whether EUR/PLN will fall to 4.20 by the end of 2026 or rise to 4.44. Erste Group expects around 4.30. My view: it could go sideways, with a slight upward pressure. There are arguments for long positions at lows. Carry trade strategies could also be interesting due to the interest rate differential.

The point is: Poland’s economy is doing better than many think. But geopolitical risks and rising debt are real factors. Those trading here should be cautious and not bet on a clear direction. The daily ranges aren’t large, so no wild swings are expected.

Definitely a good topic of conversation with Polish friends. And who knows – maybe I can still convince my neighbor that the Złoty isn’t as pessimistic as he thinks.