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HUF: Forint Gains Accelerate Despite Weaker-Than-Expected German IFO Data

HUF

The fade in the USD index from last week’s highs may be supporting the forint Monday morning, with EURHUF 0.3% lower on the session and extending the reversal off the multi-month high printed just over a week ago. HUF is among the top performers in EMEA so far today, with gains for HUF accelerating in recent trade despite the weaker-than-expected German IFO figures.

  • The IFO data for Germany signals headwinds for the recovery in Europe’s biggest economy. Given Germany is Hungary’s largest trading partner, this will add to the less-favourable external environment for Hungary’s growth prospects.
  • In its latest policy statement, the NBH noted that “Exports will be affected by opposing trends. Subdued European economic activity is holding back domestic exports, but ongoing and newly announced, significant capacity-enhancing foreign direct investment projects will continue to stimulate exports in the coming years.” Overall, the central bank left its growth forecast for 2024 unchanged at 2.0–3.0%.

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