KBC Market Research Desk
KBC Bank
Headlines
The forint extends its gains despite sell-off in EM’s world
The Hungarian forint has continued to strengthen and keeps its bullish sentiment. The EUR/HUF moved below 310 and crossed the 100-days moving average, just like PLN/HUF, which was traded at 74, CZKHUF decreased around 11.26, which was close to the 100-days moving average. It looks like that the relatively fast economic growth and especially the NBH statement that all the foreign currency need of the bank sector related to the foreign currency denominated households loans has to be converted with the NBH made the HUF more attractive (some of the risks were priced out).
The Hungarian foreign trade and current account balance also strongly supports HUF’s strengthening. According to the latest figure published by the statistical office today, Hungary’s 12-months rolling foreign trade balance stabilized around EUR 6.7bn. Both the import and export expanded by around 9% Y/Y in euro term, while by above 14% Y/Y in HUF term. The main drivers of the export growth are still machineries, vehicles.
The main question is who long this strengthening power may remain on the HUF market. Today’s ECB decision might be crucial. The 200-days moving average of the EUR/HUF is around 308.5, while the strong edge of the EUR/HUF’s weakening channel is around 307.8. So we cannot really speak about a changing trend before the HUF is not able to break these levels. If the ECB stands out with a very dovish stance, the momentum might be there to cross these levels, in other case we think that the HUF is close to the end of its last two weeks rally.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
Recommended Content
Editors’ Picks
EUR/USD retreats below 1.0700 as USD rebounds
EUR/USD lost its traction and retreated slightly below 1.0700 in the American session, erasing its daily gains in the process. Following a bearish opening, the US Dollar holds its ground and limits the pair's upside ahead of the Fed policy meeting later this week.
USD/JPY recovers toward 157.00 following suspected intervention
USD/JPY recovers ground and trades above 156.50 after sliding to 154.50 on what seemed like a Japanese FX intervention. Later this week, the Federal Reserve's policy decisions and US employment data could trigger the next big action.
Gold holds steady above $2,330 to start the week
Gold fluctuates in a relatively tight channel above $2,330 on Monday. The benchmark 10-year US Treasury bond yield corrects lower and helps XAU/USD limit its losses ahead of this week's key Fed policy meeting.
Week Ahead: Bitcoin could surprise investors this week Premium
Two main macroeconomic events this week could attempt to sway the crypto markets. Bitcoin (BTC), which showed strength last week, has slipped into a short-term consolidation.
Five Fundamentals for the week: Fed fears, Nonfarm Payrolls, Middle East promise an explosive week Premium
Higher inflation is set to push Fed Chair Powell and his colleagues to a hawkish decision. Nonfarm Payrolls are set to rock markets, but the ISM Services PMI released immediately afterward could steal the show.