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Why MNI
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.
HUNGARY
- Since the start of the year, the forint has been constantly weighing against the Euro despite the NBH hiking aggressively to protect the domestic currency.
- Even though the HUF is currently 'extremely cheap' and trades at nearly 35% below its 'fundamental value', the forint has been driven by external factors such as geopolitical uncertainty and risk aversion.
- For instance this chart shows the strong 'co-movement' between the DXY index, which could be seen as a measure of risk-aversion (elevated when USD rises), and EURHUF spot rate.
- Hence, the HUF weakness this week has been mainly attributed to the re-surge in risk aversion with the DXY index soaring back above the 107 level.
- This partly explains why today's 100bps hike by the NBH was not 'enough' to support the forint, with EURHUF still trading above the 400 level following the decision.
Source: Bloomberg/MNI
Why MNI
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.
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