The Hungarian forint shrugged off a government crisis in Slovakia and continued to move in a tight range just above the EUR/HUF 250 level. The EUR/HUF pair tried to break below the 250 support in the afternoon but it failed. Just after the closing the Finance Ministry released the January public budget figures. The figures were much better than expected since the public budget posted a HUF 140.4 bn deficit, while the MinFin projected a deficit of HUF 176 bn and analyst’s consensus stood at HUF 188 bn. Although the released figure is just preliminary (hence we do not enough details to judge what really improved the budget) it could have a positive impact on the forint, especially if the domestic bond markets is impressed. In such a case, we might expect another test of the EUR/HUF 250 level. Technically, if the 250 barrier is broken, the next EUR/HUF support will be found at the 249.65 level.
(CSOB - Investment research)