The Hungarian forint reached new 4-month
high on Friday and attacked the technical
important barrier at 260.0 EUR/HUF. The
unit recorded significant gains in spite of
unfavourable news from carmaker Audi.
Hungary’s biggest exporter said that it would
suspend investment plan, which envisaged
investments worth of EUR 1 billion in next
five years. The reason for the changes in
investment plans is tax rises, in particular the
new 4% solidarity tax on profits, which defacto
ends tax holidays, which were
guaranteed for Audi until 2011. The Forint
also shrugged off calls of the International
Monetary Fund for Hungary to restore policy
credibility and reduce fiscal and trade
deficits.
Nevertheless, the forint’s attack at the 260
EUR/HUF technical barrier failed and the
unit retreated back during the session
towards the 263 EUR/HUF level.
Today, it is the 50th anniversary of upspring
against communism in Hungary and
therefore markets are closed. Markets look
out for the interest rate decision of the NBH
on Tuesday.
EUR/HUF (6 months) New recovery high.
(CSOB - Investment research)