The Hungarian forint found strong support at the EUR/HUF 255.0 level, hence the unit managed to stop falling yesterday. The forint tested the mentioned support twice, but it failed to break it through in both cases. Hence, the market keeps to be driven by sentiment in emerging markets’ universe and it has obviously weakened in recent days.
From this perspective a drop of American stock markets during last night is clearly another bearish signal for the forint for today. Hence, more tests of the 255.0 support are likely during today’s trading and this scenario have already confirmed first deals as EUR/HUF has opened just near the 255 barrier. Recall that the next key support for the forint stands at the EUR/HUF 255.50 level. Finally, it is worth mentioning that the Finance Ministry should release the February public budget outcome. We think that the deficit should very close to the Ministry’s estimate, so it should have a neutral impact on the forint. On the other hand, if the released figure overshoots the MinFin’s projection (HUF 438 bn), the market reaction could be quite negative.