The Hungarian forint shrugged off statistics
on an higher-than-expected trade deficit as
well as on revised GDP growth. Calm
trading was not interrupted either by the
NBH Minutes, which failed to deliver
surprises and showed that while the MPC
voted unanimously for a 50 basis points
hike, some members were of the view that it
was not useful to undertake a commitment
to a tightening cycle in the future.
On Friday, the local press reported that
according to the 2006 “Economic Freedom
of the World” report by Canada’s Fraser
Institute, Hungary has the freest economy of
Central Europe. This reputable study, which
is based on the size of a government, legal
Currencies Close change structure and security of property rights,
access to sound money, freedom to trade
internationally, and regulations concerning
credit, labor, and businesses, indicates that
Hungary is a good place for long-term
investment. But given persisting problems
with the budget deficit we are skeptic that
this positive news can help the forint to
break through resistance level at 275
EUR/HUF.
Today the market will be again without major
impetuses from the domestic front. Crucial
statistics this week will be inflation, to be
published tomorrow. So, we expect investors
to maintain a wait-and-see strategy today
and the forint will hover around current levels
275-277 EUR/HUF.
(CSOB - Investment research)