The Hungarian forint extended its gains
yesterday, together with other emerging
markets’ currencies, as Fed was less
hawkish than expected. The unit broke
through the technical barrier EUR/HUF
262.0 in early trade and during the session
firmed close to the new barrier at EUR/HUF
260, which however held.
The domestic political situation supported
the positive perception of Hungary. The
government approved plans about savings
in the pension system and at the same time
Prime Minister Gyurcsány said that austerity
measures have already started to generate
expected budget revenues. Determination of
the current government to stick to planned
austerity measures showed itself also in
negotiation with biggest Hungary’s exporter
Audi, which suspended planned investment
in protest against the government’s new 4 %
solidarity tax. Nevertheless Prime Minister
claimed that “solidarity tax” will remain in
place and no company will be exempt from
it.
Today the economic calendar is empty. We
believe that profit taking ahead of weekend
will trigger a correction of the latest gains. If
the forint would break through EUR/HUF
260, which is not our scenario, the currency
pair may go towards EUR/HUF 259 barrier.
(CSOB - Investment research)