Cheating on the HUF market
In the early evening hours, we saw significant fluctuations on the forint market, currently the quotation is at the level of 386.7 against the euro.
Development of the EUR/HUF exchange rate
The forint weakened by the end of the day
Although the international investor sentiment can still be said to be relatively favorable, the US 10-year bond yield fell to 4.60%, the dollar continued its slow depreciation against the euro, and developed stock markets tended to move upwards, but the forint was still unable to gain substantial and lasting strength . By the end of the day, the intraday gain was almost reversed against the euro: the quotations rose from 386 to 387, the dollar rate rose back above 364.
Development of the EUR/HUF exchange rate
Development of the EUR/USD exchange rate
Development of the USD/HUF exchange rate
The forint strengthened further
In the afternoon trading, the forint strengthened a little further, reaching 386 against the euro and 363.7 against the dollar. According to the signs, the rising trend line indicated in our previous post in the EURHUF may be broken in today’s/tomorrow’s trading, if the improving market sentiment persists. There may be some caution in trading around the world tomorrow ahead of the US inflation data (to be released at 14:30).
Development of the EUR/HUF exchange rate
The forint is teetering on a critical level
In the relatively favorable international investor environment (the US 10-year yield has already fallen below 4.6%, the EURUSD is above 1.06, the leading stock indices are sideways after yesterday’s considerable rise), the forint has not been able to gain any significant strength for the time being. the rising trend line drawn below against the euro persists. The initial gain in the morning stalled at around 386.5, and is now trading around 387. If the forint manages to cross the trend line, it can even strengthen to around the 380 level.
The forint is also hovering around a critical level against the dollar, and it seems that it has already managed to break through the support line around 365:
In order for the strengthening of the forint to be more convincing against the dollar, the EURUSD should also be able to break through the resistance of 1.0630, which for the time being seems like a “hard nut to crack”.
Can the HUF breathe?
On Wednesday morning, the forint was around 387.4 against the euro, which represented a minimal, 0.1 percent increase in terms of the Hungarian currency compared to yesterday. Primarily, the improvement in the international mood is now helping the forint, as well as the positive news that Hungarian inflation has dropped significantly. But more importantly, the strengthening of the dollar came to a halt, and even the US currency corrected back to 1.06, while the seemingly unstoppable rise in US bond yields also reversed. Of course, the ten-year yield level of around 4.65 percent is still very high, but now there is no threat of reaching the psychological limit of 5 percent, as it was last week. On Thursday, there will be an American inflation data, which the investors pay particular attention to, and it could again have a significant impact on the global mood and risk-taking. Against the dollar, we are now around 365.3, while the British pound costs HUF 448.9.
Development of the EUR/HUF exchange rate
From a technical point of view, the forint is also at a key level, because if it can continue to strengthen today, it can break the rising trend line. And this may open the way to further strengthening, if the favorable international mood remains, then the forint may also target the 380 level.
Among the forint’s competitors, the Polish zloty and the Czech koruna started the day with stagnation. In the emerging market, the Turkish lira and the Russian ruble have barely moved against the dollar for now.
We have already mentioned the stagnation of the strengthening of the dollar, the American currency has now corrected back to above 1.06, although recently it was even below 1.05. A lot can depend on tomorrow’s US inflation data, and it can decide the direction of the next few days. The Japanese yen weakened by 0.1 percent this morning, and the British pound started the day with minimal gains.
Development of the EUR/USD exchange rate
Cover image source: Shutterstock
