Although the Hungarian inflation matched
perfectly the market consensus at 6.4 % y/y,
the forint surprisingly firmed and broke
through the strong technical barrier at
EUR/HUF 255, which the unit several times
tested in the past weeks. As a result, the unit
reached a new 9-month high at EUR/HUF
253.73. The main driver behind current
forint strength is the foreign investors’ risk
appetite and their will to buy highyielding
assets.
The economic calendar is basically empty till
the end of this week, thus the forint
development will be mostly dependent on
the regional sentiment. Yesterday’s Fed
comments indicated that Fed is aware that
US economy might slow down, which might
be slightly positive for emerging markets.
On the other hand, we still believe that the
forint is currently fundamentally overvalued
and the risk of a negative correction in case
of a change in investors’ risk appetite
remains high.
ČSOB - investment research