In the absence of domestic news the Hungarian forint tracked its emerging markets counterparts. Thanks some kind of consolidation in emerging equity markets’ the downward pressure on CE currencies eased and the forint rebounded. The unit was firming continuously throughout the session and from opening value 264.50 EUR/HUF attacked the 261.5 barrier in the afternoon, ending at the EUR/HUF 261.65.
Like other CE currencies the forint continues to be driven by shaky sentiment on global equity markets. From this perspective, the fact that US equity market did not rebound yesterday and closed actually lower is not a positive signal for the forint. In such a case sell-off on in Central European equity markets might re-emerge, which could influence the forex market too. Hence, the EUR/HUF might turn north today, but we do not expect the pair should move above the 266.0 level.
(CSOB - Investment research)