The topic of the article, the situation of the Hungarian economy and the most important challenges will be discussed in detail at our professional event.
Last Tuesday, the American inflation data, which fell more than expected, dealt a big blow to the dollar, from which it has not been able to recover since then. Moreover, it weakened even further, and the euro held on to an increasingly strong level, so this morning the process reached the point where we see a three-month euro peak at 1.0960. ECB President Christine Lagarde will give a speech at the conference of the German Ministry of Finance at 5 pm tonight in Berlin, which will be worth paying attention to regarding the outlook for the euro/dollar.
The fall of the dollar and Fed interest rate cuts priced in the medium term are usually good for the forint among emerging market currencies, but we have not seen this much against the euro since the forint has weakened from around 375.5 to 380 in recent days. This means that it has weakened just to the 200-day moving average, which is critically important from a technical analysis point of view. If it manages to stay below that today following the MNB’s interest rate decision (a 75 basis point cut to 11.5% is expected, the decision will be announced at 2 p.m., the rationale at 3 p.m.), then this points to a rate that has not been seen for years supported by real interest rates, the Hungarian currency can stay below the 200-day moving average even more permanently.
In this morning’s trading, the forint strengthened again to around 379.4 against the euro, so for the time being it was able to stay below the mentioned technical level.
Due to the fall of the dollar, the forint is close to its four-month high of around 345, but it has not yet convincingly broken through this support level. If it succeeds, it will be worth paying attention to the long-term rising trend line around 340, which will probably stop the forint’s march at first.
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