The Hungarian forint retreated slightly
throughout the whole session and in the
afternoon the unit rose above the EUR/HUF
262 level, before correcting slightly below
later on. The forint’s weakening was driven
mainly by the change in the regional
sentiment and the forint was as usual more
vulnerable than other currencies in the
region. Some impact might also have come
from the government’s decision to amend
the solidarity tax. The government decided
that it would allow deducting research and
development costs from the new 4%
solidarity tax. Thereby it met wishes of
carmaker Audi. Audi wanted to suspend a
major investment project because the new
solidarity tax ended its tax holidays, which
were guaranteed to Audi until 2011.
Today, the central statistical office will
release September’s external trade, which
should confirm the improving trend of
Hungary’s external balance. Nevertheless
markets should not be surprised by this, thus
regional sentiment again will be decisive.
We believe that the gradual correction
might continue.
(CSOB - Investment research)