Free Trial

HUF Is The Most Undervalued Currency in G10/CEE World

  • The chart below ranks the major G10+CEE currencies based on their percentage difference between the current spot rate and their 'fair' value, which we define using a Behavioral Equilibrium Exchange Rate (BEER) model (using terms of trade, inflation and 10y interest rate differentials as explanatory variables).
  • According to our model, the Hungarian Forint is the 'cheapest' among the G10/CEE world, undervalued by 15% relative to the US Dollar.
  • We saw recently that the HUF has also been trading at a very low levels relative to its historical range.
  • The Czech koruna has also been weakening in recent weeks despite CNB running an 'aggressive' tightening cycle; CZK is currently 6.3% undervalued against the USD.
  • The British pound is the most undervalued currency among the G10 world (-13%).
  • Not surprisingly, the CHF is the most 'expensive' currency according to our model, overvalued by 9.1%.

Source: Bloomberg/MNI

To read the full story



MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.