Hungarian forint firmed in early trade

The Hungarian forint profited from the absence of further violent street protests in Budapest and firmed in early trade. The forint ignored threats of the biggest opposition party Fidesz, which has called for a referendum about some parts of fiscal package, such as the tuition fees in higher education or visit payments at the doctor and reached in early trade the technical barrier at EUR/HUF 262.0. The forint was unaffected by retail sales, which were considerably higher than last month and ignored also the approval of the draft 2007 budget, which will cut the budget deficit to 6.8% of GDP. The unit thus hovered in thin trade around 262.5 EUR/HUF for the rest of the session. Today, the economic calendar is blank thus the forint will follow the region. We believe that after yesterday’s relatively soft Fed statement, the sentiment towards emerging markets will remain positive. At the same time we do not believe that the forint will break through technical barrier at EUR/HUF 260.0.

ČSOB Investment Research