How Might the Elections in Poland Affect Markets in Europe?

The political turnaround in Poland will be significant, not only for the future of Poland but also for the European Union as a whole. Poland’s parliamentary elections took place on Sunday, resulting in a victory for the liberal opposition over the conservative right-wing government that had been in power for the last eight years. Furthermore, the new prime minister is likely to be Donald Tusk, the former President of the European Council—the main strategic body of the EU.

The election result marks a new opening with key partners in Europe. Until now, the Polish and Hungarian governments have frequently stood on opposite sides of the EU, but the situation may be changing. Therefore, a very positive sentiment is noticeable in the European Union, especially in Germany, which is a key economic partner of Poland.

The political shift is also being observed by investors in Europe and around the world. Shortly after the exit poll results were announced, the Polish currency started to strengthen, as reflected in EUR/PLN and USD/PLN. Consequently, forex traders may expect more volatility in the coming days in these currency pairs.

The election results affect not only the forex market but also stock indices. The Warsaw Stock Exchange is recording significant gains and very high liquidity this week. However, close economic ties between Poland and Germany may also result in increased volatility on the DAX.

About the author

Oliwier Taraszkiewicz

Relationship Manager at Tradeview EuropeLinkedIn: https://www.linkedin.com/in/oliwier-t-14a8baa9/