What is GBP/PLN?
GBP/PLN refers to the exchange rate between the British pound (GBP) and the Polish zloty (PLN). It indicates how many Polish zlotys are required to buy one British pound. For example, an exchange rate of 5.14 indicates that 1 British pound is the equivalent of 5.14 zlotys.
The GBP is a reserve currency and the world’s fourth-most-traded currency. It acquired its status during the 19th century following Great Britain’s overwhelming dominance in the world of trade. During the last few years, the pound’s value has been driven by Brexit, the process of Britain’s withdrawal from the European Union (EU).
Even though Poland joined the EU in 2004, it still has not adopted the euro (EUR) as its national currency. The word “zloty” means gold.
What affects the price of the GBP/PLN pair?
The exchange rate of GBP/PLN could be influenced by a variety of factors.
- Political stability: Political stability in the UK, Poland, and the eurozone can affect investor confidence and, consequently, the exchange rate of the GBP/PLN pair. Political events such as elections in the eurozone and the UK, Brexit-related news, monetary policy decisions, and tensions between countries within Europe could cause volatility in the forex markets. Stable political environments are perceived as favourable for investment, leading to a stronger currency.
- Central Bank policies: Decisions made by the Bank of England (BoE) and the National Bank of Poland (NBP) regarding monetary policy, interest rates, and quantitative easing can have a considerable influence on the GBP/PLN exchange rate. Central banks' actions can affect the demand for their respective currencies.
- Economic indicators: Key economic indicators such as Gross Domestic Product (GDP) growth, inflation rates, employment data, trade balances, and interest rates in both the UK and Poland can significantly impact the exchange rate. Stronger economic performance in one country relative to the other may lead to a stronger currency.
- Trade relations: Trade balances and economic ties between the UK and Poland can also influence the exchange rate. A higher volume of trade between the two countries may lead to increased demand for their respective currencies.
What to watch out for when trading GBP/PLN?
When trading the GBP/PLN forex pair (British pound against Polish zloty), there are several factors to watch out for. Here are some key financial announcements:
- Bank of England (BoE) and National Bank of Poland (NBP) report on inflation, interest rate increases, and monetary policy announcements
- UK and Poland’s Consumer Price Index (CPI) Growth, Manufacturing Purchasing Managers Index (PMI), GDP growth, and Trade Balance
- European Central Bank (ECB) monetary policy announcements such as increases in interest rates
- UK and Poland Unemployment Rate and eurozone Unemployment