Forint in trouble – EUR/HUF is close to 400 again
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The forint has been on a steady decline against the euro and might continue its trajectory due to foreign trade flow setbacks in the coming months. The last time the forint fell so spectacularly against the common EU currency was in the spring of this year. Meanwhile, international markets are cautious, worsening the dollar exchange rate.
The forint continues to depreciate against the euro
Telex reports that the euro reached HUF 398.4 at dawn on Monday, and the situation had not improved significantly by the early hours of the day. Throughout the morning, the euro was trading steadily around HUF 398-399, and after 9 a.m., it crossed the HUF 399 mark. The Hungarian currency started the week badly, but its current deterioration did not come out of nowhere.
As Telex pointed out in a previous article, there has been a continuous deprecation in the EUR/HUF exchange rate in recent days. On 30 July, the forint reached a multi-week low against the euro, with the price of one euro hovering between HUF 392 and 395. The last time the forint performed this poorly against the euro was in March of this year.
An interesting point of comparison is that the USD/HUF exchange rate has not seen a similar fall, with Monday’s level of HUF 364 even an improvement on the price four days ago. This is due to the fact that, as Portfolio writes, international markets remain highly pessimistic, with recession fears in the US increasing significantly in recent days. This has caused a sharp weakening of the US dollar.
Macroeconomic data brings bad news for the forint
Meanwhile, Portfolio also reports that the latest Hungarian macroeconomic data do not paint an encouraging picture for the forint. Citing the analysis of Gábor Regős, Chief Economist at Granit Fund Management, the site writes that although the Hungarian trade surplus is significant, it has seen significant setbacks, and the decline in the value of foreign trade could have a negative impact on the forint.