Sometimes trading currencies is just more fun when you feel emotionally connected to the country. For me, that’s Poland – not only because of my Polish neighbor, but also because it automatically makes me more engaged with the country’s economy and politics. That helps tremendously with forex trading. Recently, I’ve been analyzing the EUR-PLN currency pair more intensively, and my neighbor immediately advised me to be pessimistic about the zloty. His concerns: the current government and the risk that the Ukraine war could spill over into Poland. Understandable, but as someone who studies economics, I wanted to analyze it more systematically.

What’s interesting is: The current exchange rate is around 4.27 PLN per euro (as of May 2026). At first glance, that doesn’t sound particularly exciting. But the chart tells a different story. After the Ukraine war, the euro initially rose sharply but has been steadily declining for about three years. This suggests that the zloty is actually strengthening – contrary to my neighbor’s forecast.

What’s behind this? Let’s look at the factors influencing EUR-PLN. First, the interest rates: Poland currently has a key interest rate of 4.75%, while the Eurozone’s is only 2.0%. Higher interest rates attract foreign capital and support the currency. That favors the zloty. Then, GDP growth: Poland is expected to grow about 3.5% in 2025 and 2026, while the Eurozone only around 1.2% and 1.0%. Poland also has the edge here. The unemployment rate in Poland is 3.1%, compared to 6.2% in the Eurozone – a significant difference.

On the other hand: Inflation in the Eurozone (2.4% in 2024) is significantly lower than in Poland (3.7%). For 2025, a decline to about 2.1% is expected in the Eurozone, but only to 3.6% in Poland. That could support the euro. Public debt is another point – Poland’s debt has risen to over 416 billion euros by Q2 2025, with an upward trend. That’s a weakness for the zloty.

Politically, things look better in Poland than expected. The government under Prime Minister Tusk enjoys broad support. The Ukraine war burdens both countries, but Poland’s labor market even benefits: The employment rate of Ukrainian refugees is around 70%. That’s notable.

What does this mean for the forecast? Analysts are divided. Some expect a fall to 4.20 EUR/PLN, others see levels of 4.44. Erste Group forecasts 4.30 for 2026. My impression: There’s a lot pointing to a sideways movement with a slight upward pressure on the euro. The higher Polish interest rates and stronger growth support the zloty, but the lower Eurozone inflation and the stabilizing European politics could push the euro higher again.

For active traders, this is interesting: The currency pair doesn’t move wildly but offers regular trading opportunities at lows. Those betting on sideways movement can also pursue a carry trade strategy – the interest rate differential is attractive. If you’re interested in similar dynamics, you might also look at the CHF-PLN rate, where similar factors are at play.

My conclusion: I can’t quite agree with my Polish neighbor. The zloty has appreciated significantly in recent months and has good arguments in favor of itself through higher interest rates, economic growth, and low unemployment. At the same time, higher inflation and geopolitical risks are reasons for caution. As a trader, you should stay flexible – not too aggressive, but not too pessimistic either. The daily ranges are moderate, allowing for relaxed trading. And honestly: Even if the EUR-PLN pair doesn’t promise spectacular gains, it at least provides conversation material with Polish friends and neighbors.