Exploring The Minor Forex Pairs: EUR/PLN

With an increasing amount of retail forex providers out there – such as financial betting companies to CFD providers – trading the forex markets looks set to continue its rise in popularity.

It’s usually the major forex pairs that steal all the headlines but there are many opportunities to be found on some of the world’s so called minor currencies.

Let’s take a look at some of the current issues facing the euro (EUR) against the Polish zloty (PLN).

It’s been difficult to escape the headlines made by the eurozone’s recent sovereign debt problems. The process of creating common fiscal bonds across an increasingly fractured eurozone starts now.

Meanwhile, Poland, a member of the wider European Union, has managed to buck the trend by posting consistent positive GDP growth figures throughout the recent global economic turmoil. The growth is likely to continue this year too with a figure of 4% being the current prediction as demand for its goods, both domestically and from the eurozone, remains strong.

However, France and Germany’s recent flat economic growth figures for the second quarter have served as another reminder that these are still very uncertain times.

According to Bloomberg, the European Central Bank spent a record €15-20 billion on government bonds during the latest eurozone debt crisis, which threatened Italy and Spain this time. As a result, it was Italy’s economy and finance minister, Giulio Tremonti who was the latest to call for common eurobonds to be issued – an idea that was dismissed by Germany’s chancellor Merkel Germany and France’s president Sarkozy who both have domestic political hurdles of their own to negotiate.

The two leaders, in their recent meeting and subsequent media conference, stressed the need for a ‘step-by-step’ programme toward greater fiscal integration starting with twice-yearly meetings of all the heads of the eurozone.

Initial reaction within the financial community has been mixed.

Since the crisis began many economists have held the view that closer fiscal integration looks not only inevitable, but increasingly crucial if the eurozone is to survive, and so to them, these measures will seem at best cautious and at worst irresponsible.

Looking longer term, Poland will be hoping for a stronger, wiser eurozone to emerge triumphant from the ashes of its recent crisis, and, on the domestic front, that it can find the investment required to modernise its road and rail network to secure further future economic growth.

If you have knowledge of one major currency you’ll likely find many similarities in the economic factors that will influence its relationship with other minor currencies.