The Hungarian forint is back in an easing
mode and yesterday’s price action clearly
confirmed that the currency’s recovery was
just short-lived. The change of the positive
trend, which had been seen in previous
sessions, was triggered by market concerns
that the MinFin’s target of the March public
budget would be overshot by HUF 90 bn as
repeatedly reported local press. However,
the bearish market move was extended by
rising bond yields in the euro-zone in the
afternoon. An anecdotal evidence of
deterioration of the market sentiment in highyielding
markets was then another drop of
the Icelandic crown, which once again lost
ground in the evening (CET).
Thus, looking at the intra-day trading: the
forint appeared under pressure right after
the opening as the EUR/HUF pair fell from
the starting level of 262.95 to the 264 zone.
The pair then moved sideways while in the
afternoon and during the off-shore trading it
moved further north. This morning,
EUR/HUF has been already trading in the
266 area.
The forint appears in very danger situation
as the vulnerable currency is facing several
immediate risks: potentially hawkish ECB
press conference (Thursday), an
unpredictable outcome of the first round of
elections (Sunday) and release of the March
budget figures (Monday). Given these risks
the (very) short-term outlook for the forint is
clearly negative. Technically speaking it
means that EUR/HUF can test its 25-months
high (268.0) soon.
(CSOB - Investment research)