Lacking any domestic or external impetus the Hungarian forint retreated slightly in Friday’s illiquid trade. Nevertheless during the night the nervousness ahead of NBH rate setting meeting and US equity weakness triggered significant looses of the currency. Hence the forint retreated behind 280 level against the euro. Today, the forint will closely watch NBH rate setting meeting.
Since we expect in line with the market only a 25 bps hike (for more details see the Fixed-income part), the forint will hardly recoup much of its losses. In focus will be also bank’s comments which might indicate how much is the central bank determined to return inflation to 3 percent level by 2008 as stated earlier. EUR/HUF back close to 280 resistance.
(CSOB - Investment research)