The forint was around 388.9 against the euro on Tuesday morning, which was a 0.3% increase in terms of the Hungarian currency compared to last night’s quotation. However, it would be premature to talk about a significant strengthening, the Hungarian currency weakened by 2.3% in the last week. On the other hand, the forint gained at least some air after the quotation was close to 392 on Monday afternoon, and it was also characterized by a serious underperformance compared to its regional competitors. One of the reasons for this may have been Prime Minister Viktor Orbán’s parliamentary speech in the afternoon, in which the prime minister projected further price control measures and the reduction of inflation in coordination with the central bank. These non-market-friendly measures may have provoked resentment among investors, which may have been reflected in the weakening of the forint. We are now at 372 against the dollar after the historical peak of over 375 yesterday, while the British pound is currently at 459.6 forints.
Competitors in the region started the day with a minimal strengthening, but in recent times the underperformance of the forint is still noticeable, as the Polish zloty and the Czech koruna strengthened by about one percent in addition to the already mentioned 2.3% weakening. In emerging markets, the Turkish lira started the day weakening 0.4% and the Russian ruble stagnated against the dollar.
In principle, the correction in the dollar market could also help the forint, and it was really painful that the forint weakened significantly on Monday. So far, we have been able to talk about the fact that the strengthening of the dollar crosses the forint and prevents it from strengthening more significantly. Now, however, the euro-dollar has receded from below the level of 1.04 seen last week to over 1.045, which should in principle help the Hungarian currency as well. The bad news is that most experts say we are only seeing a temporary halt in the exchange rate now, and the trend of strengthening the dollar is probably not over yet. The US currency is set to weaken 0.2% on Tuesday morning, with the Japanese yen showing a minimal shift for the time being, while the pound sterling has strengthened 0.3%.
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