HUF: Forint Extends Recovery from Thursday’s Lows, Focus Turns to GDP Data

The forint has extended its recovery from this week’s lows as a more stable risk backdrop contributes to the broader rebound across the emerging markets space. Eurostoxx 50 futures have bounced ~1.6% off yesterday’s lows which is likely the primary driver behind the moderate strength in CE3 FX today. Hungary-specific factors have been limited.

• On a weekly basis, the forint lags the Polish zloty, potentially owing to the 25bp NBH rate cut delivered earlier this week. While that decision was in-line with estimates of a majority of analysts, some had foreseen no change this month. Our full review can be found here.
• Looking ahead to next week, preliminary data for Q2 GDP will cross on Tuesday, where growth of +2.3% Y/Y is expected compared to +1.1% prior. Economy Minister Nagy said yesterday the figures probably won’t show an improvement compared to Q1 as Hungary’s industry exports are holding back growth, however, the minister forecasts growth of 2-3% for 2024 overall. That is in-line with the NBH’s forecast.