The Hungarian forint traded for the first
time on the weaker side of 282.36 central
parity and fell to a new all-time low at 285.10
versus the Euro on Thursday (1.7% down
from Wednesday’s closing value). The
decline started on the negative news from
the Slovak coalition and the weakness of
emerging markets supported worries about
the sustainability of Hungary’s public
finance. Also caution before Fed meeting
Currencies Close change made the forint vulnerable.
Nevertheless the
fact that the NBH has allowed the HUF to
drop to current levels shows that decision
makers are less dogmatic about the HUF
than in the past.
We still think that the forint will remain
under negative pressure until the central
bank will raise rates. On the other hand
today smaller-than-expected current account
deficit, together with unexpectedly less
hawkish comments of Fed might help the
Hungarian currency to recover slightly.
Forint hits new all-time lows.
(CSOB - investment research)