MENU

Forint Set to Breach All Time Record Against Euro

Central Bank Fails to Calm Market Nerves

D&T
September 25, 2020

The Hungarian currency has been on a weakening path for the past weeks and is trading dangerously close to its weakest ever against the euro, seen in April this year. In addition to unfavorable international sentiment, local supporting factors have also vanished and analysts argue that the forint may set new negative records in the short term.

The Hungarian forint is gradually drifting toward the historical low seen in the spring. Given the unsupportive domestic and international backdrop, there is a slim chance the currency will get back on its feet any time soon. Analysts warn that the EUR/HUF 370 level has moved into sight again and the technical picture is worrying.

Shorting the forint
This week, the forint’s exchange rate against the euro inched above 365, a level last seen on April 1, when it nearly hit 370. The exchange rate movements of recent weeks - the Hungarian currency weakened by more than 3.5% against the euro in one month - pointed in the direction of an increase in short positions against the forint. A short position means that investors are betting the price of an asset, in this case the forint, will decrease in value. If the price drops, investors can buy the assets at the lower price and make a profit. The weakening of the forint was steeper than that of other regional currencies, as the Polish zloty lost 1.8% of its value and the Czech koruna dropped 3.2%. All this suggests that market players have turned on the Hungarian currency. Recently released central bank data also underpin this development, as the figures show the stock of current short positions rising to HUF 2,869 billion from HUF 2,562 billion a month earlier.

Why the weakening?
László Szabó, one of the owners of Hold Fund Management, argues that the recipe for a strong currency requires a few basic ingredients. "For a good (strong) currency, take a small interest rate (even better if not so small), a positive balance of payments, a strong economic ally (that you can rely on in difficult times, such as the ECB,) or some combination of the above; naturally, a supportive international investor sentiment is the icing on the cake," Szabó writes on at Alapblog.hu website.
Unfortunately, all the listed ingredients are missing or in short supply. Not so long ago, all the factors needed for a stable forint were available: Hungary had significantly higher interest rates than the Eurozone, an ample current account surplus and a steady inflow of EU development funds. As time passed, these advantages vanished: first, the high interest rate, followed by the current account surplus. In addition, the political differences between Brussels and Budapest may have a negative impact on the inflow of development and crisis relief funds from the EU. To make matters even worse, measures introduced to stave off the economic fallout from the coronavirus crisis have led to a widening of the country’s budget deficit, which may reach 8% of GDP this year. In today’s world burning with Covid fever, it takes less than the above for a country to be billed "risky" by the market, according to Szabó.
More recent developments have also been working against the forint. The rate of inflation jumped unexpectedly in July and the headline figure rose further to 3.9% in August, virtually reaching the top of the central bank's target band (3 plus or minus one percent). This would have warranted some sort of monetary tightening, however the central bank decided to leave monetary conditions unchanged.

Central bank message
After Tuesday's interest rate decision, the Monetary Council emphasized that inflation remains their main concern, and if the inflation outlook changes permanently and significantly, policy makers are ready to use all the tools at their disposal. This message apparently fell short of calming investors as the forint continued to weaken the day after the central bank decided to keep the interest rate unchanged.
“The central bank failed to reassure investors about the fate of the forint, thus the forint is set to remain under pressure. Other regional currencies also weakened against the euro, suggesting that there is a general pressure on the region. Under these circumstances, it is conceivable that the EUR/HUF exchange rate will soon test the 370 level again,” according to analysts at Erste Bank Zrt.
Looking ahead, a number of domestic and international factors will prove decisive for the forint in the short run. Hungary’s September inflation data, to be published in early October, and the GDP figures for the third quarter (due in mid-November) will shape the near-term future of the Hungarian currency. On the international front, a continued strengthening of the US dollar would be bad news for the forint. In this respect, the outcome of the presidential elections in the US, scheduled for November, will be crucial for the dollar and consequently for the forint.

D&T

No comment yet. Be the first!

Leave a Reply

Your email address will not be published. Required fields are marked *

15 − twelve =

  • Top 5 Articles


  • Articles by Date

  • Hashtags

    #Abel Prize #Academy #Academy Awards #Accenture #Accident #acquisition #Adrian Ellis #Adriana Gonzalez #Advanced Power AG #Adventure #Advertising #Advertorial #Aerospace industry #Afghanistan #Africa #Agency #Agrarian industry #Agreement #Agricultural machinery #agriculture #Ahna Capri #air cargo #Air navigation #Air traffic #Air transport #air travel #Airbus Helicopters Hungary Ltd. #Airline industry #Airplane Gizi #airport cargo #Albania #Alberto Vercelli #Aldi #Alexander Tolkach #Aliza Bin-Noun #Allison Transmission Ltd. #ALTEO Plc. #Ambassador David B. Cornstein #Ambassador David Nájera #Ambassador Kumar Tuhin #Ambassador Kyoo Sik Choe #Ambassador Massimo Rustico #Ambassador of India #Ambassador of Malaysia #Ambassador of the Republic of Korea to Hungary #Ambassadors #Ambassadors in Budapest #AmCham #American Airlines #American football #Amos Oz #Andersen Consulting #András Simor #Andrea Jádi #Andrew G. Vajna #Angela Merkel #Angola #Animal husbandry #Animals #Ankita Sood #Anna Nánási #Anna Olasz #anniversary #Annual report #Antal Dreher #Antal Rogán #Antal Vöneki #Anthony Nolan foundation #Antro Moveo #Anunciada Fernández de Córdova #ANY Security Printing Company Plc. #Appeninn Asset Management Holding Plc. #Apple Design Awards #Ararat #archeological excavations #Archeology #Ariston Thermo Group #Armenia #Arms trade #Arraiolos Group #Arrow Architects #art gallery #Art Hall #Art treasure #ASEAN #Asset management #Association of Immortal Hungarian Athletes #Association of Innovative Pharmaceutical Manufacturers #aston martin #Astronomy #Athlete of the Nation #Attila Grandpierre #Attila Mesterházy #Auchan Hungary #Audi #Audi Hungaria #August 20th #August 20th national holiday #Australia #Austria #Automobile industry #Automobile sales #automobile trade #automotive #Automotive industry #Automotive sector #AutoWallis #AutoWallis Group #Avatar #Aviation industry #Award #Azerbaijan
    #bag tag #bakery #Balassagyarmat #Balaton #Bálint gazda (Master Bálint) #Ballet company of Gyõr #Bálna event center #Baltic Sea Festival #Baltic states #Ban Ki-moon #Ban on hospital visits #Bank for International Settlements #bank loan #Bank of China #Bank transfer #Banking #Banking sector #Banking system #banknotes #Barack Obama #BASF #basketball #battery production #Battle of Mohács #Bayern Munich #BBC #Beer #Béla Bartók #Belgium #Bell Food Group #Benelux #Béres Pharmaceuticals #Best of Budapest and Hungary #BHS Trans Limited #bicycle #Bicycle path #bilateral agreement #Bilateral relations #Bio ethanol #Biotechnology #Bisnode Hungary #Bisserka Benisheva #BKV #Black Ribbon Day #Blood donation #BMW #BMW cars #BMW Group #Bocuse d’Or #Bocuse d’Or Europe 2020 #Boglárka Kapás #Bond issue #bond market #book festival #book review #Border closure #Border control #border crossing #BorderLINE Architecture #Bozsik Stadium #brandy #Brazil #Brazilian Development Bank (BNDES) #Breast cancer #Breeding #Brexit #British Ambassador #British Chamber of Commerce in Hungary #British Council #British Telecom #Broadband internet #Bronislaw Komorowski #Buda Castle #Buda Hills #Budakalász #Budapest #Budapest Airport #Budapest Airport Co. Ltd. #Budapest Chamber of Commerce and Industry (BKIK) #Budapest City Branding Nonprofit Ltd. (BVA) #Budapest Dessert competition #Budapest Eurogames 2012 #Budapest Festival Orchestra #Budapest film #Budapest Fire Service #Budapest ghetto #Budapest Highland Golf Club #Budapest hospitals #Budapest Jewish Community (BZSH) #Budapest Marathon #Budapest Mayor Gergely Karácsony #Budapest Millennium Underground #Budapest Municipality #Budapest ONE office building #Budapest Opera Ball #Budapest sights #Budapest Sports Office #Budapest Stock Exchange #Budapest Strings Chamber Orchestra #Budapest University of Technology and Economics (BME) #Budapest Week Publishing #Budapest Wine Festival #Budapest Zoo #Budapest Zoo and Botanical Garden #Buddhism #budget #Budget policy #Building supplies #Bulgaria #Bundesliga (Austria) #burglary #Buses #business #Business club #business costs #Business Council for Sustainable Development in Hungary (BCSDH) #Business Council for Sustainable Development in Hungary’s (BCSDH) #Business environment #Business promotion #Business services #Businesspeople #Busójárás #Butterfly Garden
    #cable car #campaign financing #Canada #Canadian Chamber of Commerce in Hungary #cancellation #Cancún Climate Summit #Canoe #capacity increase #Capital Circus of Budapest #Capital injection #car market #car racing #car rental #car sales #car sharing service #Car trade #carbon neutrality #Card payments #Carl Bildt #Carl Lutz #Carnival season #cars #Cartel #Cash #Cash payment #CEE region #Celldömölk #Census #Center for Budapest Transport (BKK) #Center of Excellence #Central Bank #Central Europe #Central European Initiative #Central European Press and Media Foundation (Kesma) #Central European University #Central European University (CEU) #Central Statistical Office #Ceremony #CERN #Cervantes Institute #Cetelem Bank #Chamber #Chamber of commerce #Champagne #Chang Sun Dong #Charbel Stephan #Charity #Chemical Industry #Chemistry #chess #Chief Medical Officer Cecíla Müller #Chief Medical Officer Cecília Müller #China #Christian Mühlethaler #Christmas #chronic patient #Chung-ha Suh #CIG Pannonia Life Insurance Plc. #cigarettes #cinema culture #Citibank #City diplomacy #Civil engineering #Civil Movement #Civilian engineering #CLA 250 e Coupé #CLA 250 e Shooting Brake #climate change #CMS Cameron McKenna #cobot #Code of Civil Procedure #Collector coins #Colleen Bell #Colliers International #Colorful City Group #columbia #Commemoration #Commemorative coin #Commerce #Commercial accommodation #Commercial Award of Excellence for Hungarian Products #Communications #Competition #Competitiveness #Concert #Conference #Conscious Consumption #Constitution #Constitutional Court #Construction #Construction industry #Consuls #Consultancy #consumer confidence index #Consumer prices #Contactless payments #contemporary art #contest #Convention tourism #Convertiplane #COP26 #Cordia #Corinthia Hotel Budapest #coronavirus #Coronavirus epidemic #Coronavirus test #Corporate issues #corporate merger #Corporate real estate #Corporate social responsibility (CSR) #Corruption #Count Andrássy Picnic #countryside #Courts #Covid-19 coronavirus #Covid-19 pandemic #Crime #crisis #Crisis management #Croatia #cronyism #Csodalámpa (Magic Lamp) Foundation #Csopak #Csurgó #cultural festival #cultural institute #Cultural Interview #Culture #currency #Customer service #customs service
    #D.C. #DAB+ #Dag Hartelius #Daikin #daily death toll #Daily record of infections #Dalai Lama #Dániel Gyurta #Danube #Danube Bend #Danube cruise #Danube Ingrid #Darfur region #David Cornstein #Death #Debrecen #Debrecen Carnival of Flower #Debt #decision-making #Deckscreen #Defense #defense industry #Deloitte #Deloitte Digital Hungary #Deloitte Hungary #Deloitte Technology Fast 500 EMEA list #Delta Group #Democracy #Democrats Abroad-Hungary #Demonstration #Denmark #Denso Manufacturing Hungary #dental tourism #Deputy CEO of the Hungarian Tourism Agency (MTÜ) #Derks Wilhelmus Jose­phus #Design #Design Without Borders #Deutsche Telekom #Deutsche Telekom IT and Telecommunications Hungary #Deutscher Wirtschaftsclub – DWC #Development program #Development project #Digital banking #digital channels #digital classroom #Digital education #Digital work schedule #Digitalization #Dimitris Yannakakis #dinosaurs #Diósgyőr Castle #Diplomacy #Diplomacy and Trade Business Club ('The Club') #Diplomatic credentials #Diplomatic Spouses of Budapest #Disability Caucus #Disadvantaged people #Disaster #Disaster Management #Disaster management legislation #disinfectant #Dividend payments #Domestic issues #Domestic tourism #Dominik Szoboszlai #donation #Dongwha Electrolyte #Dr. Andrea Jádi Németh #Dr. György Kárpáti #Dr. István Béres #Dr. János Szlávik #Dr. László Szabó #Dreher Beer Museum #Dreher Breweries #Drugs #DT April 2009 #DT April 2010 #DT April 2011 #DT Business & Culture Club #DT December 2009 #DT February 2009 #DT February 2012 #DT January 2011 #DT January-February 2013 #DT July-August 2011 #DT June 2009 #DT June 2011 #DT March 2011 #DT May 2010 #DT May 2011 #DT November 2010 #DT October 2008 #DT October-November 2011 #DT September 2009 #Dual education #Duna Elektronika #Duna House #Dyntell Hungary Ltd.
    #e-mobility #E.ON #East Central Europe #Easter #EBITDA #ECOFIN #Ecology #Economic forecast #economic reform #Economic relations #Economic sentiment index #Economy #Edit Herczog #Education #Eger #Egg #Egyházasrádóc #Egypt #Eisberg #EIT Health #Elderly home #Elections #Elections in Hungary #Electric batteries #Electric charger #Electric vehicle battery #Electric vehicles #Electricity #Electricity grid #electricity industry #Electro-mobility #Electrolux #Electronic industry #Electronic payment #Electronic Payment Service Providers’ Association (EFISZ) #Electronic Payment Strategy (EPS) #Electronics industry #Eleni Tsakopoulos-Kounalakis #ELTE #Embassy of Spain in Budapest #EMEA region #Emergency #Emigration #Emmy Awards #Employees’ rights #Employment #Enda Kenny #Endre Szemerédi #Energy Efficient Mortgages Initiative (EEMI) #Energy Efficient Mortgages Pilot Scheme #Energy industry #energy policy #Energy production #energy security #Energy supply #Engineering #Enikõ Gyõri #Enikő Mihalik #Enrique Pastor de Gana #Environment #environment protection #Eörs Szathmáry #epidemic #Epidemiological preparedness #epidemiological restrictions #Equestrian event #Equifest #Ernõ Rubik #Erste Bank #Ervin Zádor #Esther Horvath #Estonia #Eszter Cseke and Andras S. Takacs #Esztergom #Ethanol #EU #EU affairs #EU cooperation #EU funding #EU funds #EU General Court #EU loan #EU Presidency #EU supported projects #EuCham - European Camber #Eucham European Chamber #Euro (EUR) #Europe Day #European Automobile Manufacturers Association (ACEA) #European Bank for Reconstruction and Development (EBRD) #European Capital of Culture #European Central Bank (ECB) #European Championships #European Climate Bank #European Commission #European Court of Justice #European Court of Justice (ECJ) #European Day of Parks #European Football Championship #European Green Deal #European Institute of Innovation and Technology (EIT) #European Molecular Biology Organization (EMBO) #European Parliament #European Super Cup #European Union #European Year of Volunteering #Eurowings #evacuation #Event industry #Exchange rate #Exhibition #Exhibition site #Export promotion #Exports #Exposition #External Action Service of the European Union #External trade #Eydescreen
    #H-UNCOVER #Hableány (‘Mermaid’) river cruise ship #Hackathon #Haiti #Half-year report #Hamad International Airport #handball #Hankook #Használtautó.hu #Health #healthcare #Healthcare workers #Heat record #Heavy industry #Heim Pál National Pediatric Institute #Heineken #HEINEKEN Hungária #Hell Energy Hungary Plc. #Henkel #Herbert Fisch #Herman Van Rompuy #Hidden Power #highway #Hillary Clinton #History #Hódmezővásárhely #Holiday season #Hollywood #Holocaust #Home office #Home quarantine #Homokhátság #Hong Kong #Honorary consul #Honorary consuls #hops #Horizon Development #Hörmann Hungária #Horse polo #horticulturist #Hortobágy Bridge Fair #Hortobágy National Park #Horwath HTL Hungary #hospital #Hospitality #Hospitality business #Hospitals #Hotel boats #Hotel industry #hotelier #hotels #House concert #Household products #Housing #Housing market #Hoventa #Howmet-Köfém Plc. #HR Services #huawei #Human rights #Hungarian Academy of Sciences #Hungarian Academy of Sciences (MTA) #Hungarian Ambassador to the U.S. #Hungarian Banking Association #Hungarian Chamber of Health Care Professionals (MESZK) #Hungarian Competition Authority #Hungarian cultural season #Hungarian Democratic Forum (MDF) #Hungarian diplomats #Hungarian economy #Hungarian EU Presidency #Hungarian European Business Council (HEBC) #Hungarian F-1 Grand Prix #Hungarian Film Week #Hungarian Food Bank Association #Hungarian Foreign Ministry #Hungarian Foreign Ministry (Ministry of Foreign Affairs and Trade) #Hungarian forint (HUF) #Hungarian GDP #Hungarian gov't vs. EU #Hungarian government #Hungarian Holocaust #Hungarian Independent Trans­mission Operator Company Ltd. (MAVIR) #Hungarian industry #Hungarian Interchurch Aid #Hungarian inventors #Hungarian Investment and Trade Agency (HITA) #Hungarian Investment Promotion Agency (HIPA) #Hungarian Labor Code #Hungarian language #Hungarian League Against Cancer #Hungarian Maltese Charity Service #Hungarian Medical Chamber #Hungarian Meteorological Service (OMSZ) #Hungarian military #Hungarian Ministry of Finance #Hungarian Ministry of Foreign Affairs and Trade (KKM) #Hungarian Museum of Science #Hungarian Museum of Science Technology and Transport #Hungarian National Asset Management Inc. (MNV) #Hungarian National Blood Transfusion Service (OVSZ) #Hungarian National Gallery #Hungarian National Museum #Hungarian Olympic Committee (HOC) #Hungarian Open Air Museum #Hungarian Parliament #Hungarian Polo Club #Hungarian President János Áder #Hungarian Press Photo Exhibition #Hungarian Red Cross #Hungarian society #Hungarian Tourism Agency (MTÜ) #Hungarian-born #Hungarians abroad #Hungaricum #HungaroControl #Hungaroring #Hungary #Hungary politics #Hungary tourism #Hungexpo #hybrid car #Hygiene #hygienic safety #Hyundai
    #Machinery industry #Madagascar #Mads Sandau-Jensen #Magyar Rádió (Hungarian Radio) #Magyar Suzuki #Magyar Telecom #Magyar Telekom #Magyarföld #Mahart Passnave #Malay Mishra #Malév Hungarian airlines #Mandatory quarantine #Manfred Bey #marathon run #Maria Assunta Accili Sabbatini #Marketing #Markku Virri #Martin Gauss #Márton Fucsovics #mask-wearing #MASTERPLAST #Mateco-Hungary Ltd. #Matei I. Hoffmann #Mátra Hill #Matriculation exam #Matterhorn #MÁV Hungarian Railways #Maximilian Hell #Media #Media law #Mediaworks #Medical industry #Mellow Mood Hotels #Mélykút #Memorial walk #Mercedes #Mercedes Benz #merkel #Messer #Mexican Embassy in Budapest #Mexico #MFGK Croatia d.o.o. #Michael Ignatieff #Midsummer night #Migration #Mihály Kolodko #Mihály Munkácsy #Mihály Varga #Miklós Radnóti #Mikulás Dzurinda #Military #Millennium generation #Minister of Agriculture István Nagy #Minister of Defense #Minister of Foreign Affairs and Trade #Minister of Human Capacities #Ministry of Human Capacities (EMMI) #Ministry of National Development #Ministry of National Economy #Ministry of the Interior #Minorities #Miroslav Lajèák #Miskolc #Miskolc rally #missiles sales #Mitt Romney #Mobile base station #mobile broadband #Mohács #MOL #MOL Group #MOL Hygi #Monetary policy #Monostor Bridge #Monterrey #Moody's #Móric Benyovszky #Mortgage #Motion picture #motoGP #Motorcycle #Motorway #Mountaineering #Movement restrictions #Municipal elections #Municipality #mural #museum #Museum of Fine Arts #Museums #Music #Music in the Forest - Mátra Art Days #MVM Group
    #São Tomé and Príncipe #Sali Berisha #Sameer Hamdan #Samsung #Samsung SDI #Samyang Biopharm #Sándor Csányi #Sándor Demján #Sándor Képíró #Sándor Kiss #Sándor Kőrösi Csoma #Sándor Pintér #Sang Il Lee #Sanofi #Saudi Arabia #Scandal #Scholarship #School year #Schools #Science #scuba diving #second-hand car sales #security issues #Semmelweis University #Semmelweis University of Budapest #Sensirion #Sérgio Eduardo Moreira Lima #Service center #Service sector #sewage water #Shanghai #Shanghai World Expo 2010 #Shapr 3D #Shell #shopping #short film #shortage #show jumping #Siemens #Sika #Singapore #Singapore Airlines #Siófok #Skanska #Skanska Hungary #Slovakia #Slovenia #Slovenian Tourism Organization (STO) #Sludge #Smartphone application #SME Robotization Barometer #SMEs #Smoke-free future #Snow #Soccer #Social(i)Makers #Society #Society for Freedoms #Solar energy #Solar panels #Solidarity Club #Son of Saul #South Africa #Soviet Union #Space research #Spain #Spanish language #SPAR #Spar Hungary #special taxes #Sponsorship #Sports #Sports club #Stadler #Stalinism #Start-ups #State Auditing Office #State of danger #State of emergency #State of the Nation #State subsidies #Statistical data #Statue #Stefan Pop #Stefánia Palace #stepdance #Stock exchange #Stockholm #Straumann #Street music contest #Sudan #Suh Chung-ha #SUHANJ! Foundation #Sumatran orangutan #Summer Olympic Games #SunDell Estate Plc. #SungEel Hitech Hungary Ltd. #Sunshine Garage #Supercharge Ltd. #Superfast Internet Program #Supermarket chain #Suppliers #Suriname #survey #Sustainability #Sweden #Sweet Days Budapest #Swimming #Swiss Embassy - Budapest #Swisscham Hungary #Switzerland #Symbol #Syria #Szabolcs Takács #Szamos Marzipan #Szeged #Szeged Open-Air Festival #Szeged wholesale market #Szentendre #Szerencsejáték Plc. #Sziget #Szigetszentmiklós #Szolnok #Szusza Ferenc Stadium
  • © Copyright 2020 Duax Kft. –  All rights reserved.
    searchenvelope-oalign-justifytwitterfacebookfeedinstagrammoon-osunearth