On Thursday, the Hungarian forint was
traded around 280 EUR/HUF throughout the
whole session, which was weaker than
Wednesday’s closing values. The main
reason behind weakening was heightened
tension in the Middle East and negative
comments from EU Economic and Monetary
Affairs Commisioner Joaquin Almunia. In a
newspaper interview he said that Hungary’s
public finances are the most problematic in
EU. On the top of that, uncertainty persists
on the proposed tax changes. The new tax
law proposal approved by parliament was
sent to the president and if he sends the law
to the Constitutional court (opposition
claimed that several of proposed measures
are unconstitutional), the process of
consolidation of public finance would be
slow down, which would be unambiguously
negative for the markets. President has time
until Monday to decide.
Today the risk remains for the forint to be
negatively influenced global emerging
market uncertainty due to the tension
between Israel and Lebanon. The forint this
morning already trades back above the
central parity at 282.36 EUR/HUF. A
sustained break above would open de way
to the highs in the 285-area.
(CSOB - Investment research)