The Hungarian forint gave up its Monday’s
gains as it tracked the Polish zloty lower
yesterday. Nevertheless, forint loses were
relatively modest, since the sell-off
materialized rather through the bond market
in Hungary.
Looking at the intra-day trading: the
EUR/HUF pair just followed EUR/PLN
gradually north. Although there were several
important domestic fundamental news (the
December CPI, fresh MinFin budget
estimates or S&P comment on rating’s
development), the key driver of yesterday
price action was the EUR/PLN movements.
So, EUR/HUF drifted lower through out the
250 zone and closed just below the 251.0
level.
Today’s price action will be again
determined by market sentiment in the
Polish FX market, where we expect no
improvement. So the forint may suffer again
due to political instability in Poland.
Moreover, the market might already feel
some negative side effects from market’s
pre-positioning ahead of tomorrow’s 5Y and
10Y government bond auction.
(CSOB - Investment research)