The Hungarian forint firmed on Friday morning on improving sentiment towards emerging markets but it gave up most of its gain during the afternoon, ending at 278.0 EUR/HUF, only slightly firmer than its opening values, 278.45 EUR/HUF.
The forint will wait for today’s NBH meeting. Since big uncertainty is persisting over rate decision we believe that the forint will be without clear trend before the final decision is published. We believe that only bigger hike might support the forint. Should our expectation prove to be correct and NBH will increase base rate by 25 bps the forint will most probably remain weak around 278-280 EUR/HUF level.
(CSOB - Investment research)