Forint unable to stand up: Despite good news, rapid weakening continues
Despite continuous good news for the forint, the Hungarian currency is weakening again. This might come as a surprise given that both the central bank and the finance minister have indicated that they want a stable exchange rate. It is highly possible that there is a technical reason behind it now, after the failure to break through the high level in the strong direction.
In the early morning hours, it seemed like the forint could be strengthening. However, it changed directions real quick: in just an hour, the euro strengthened 4 units against the forint, Portfolio writes.
This happened despite the fact that in recent days, lots of good news have surfaced about the forint. Firstly, a central bank analysis announced that the devaluation of the forint is no longer considered favorable. After this, the Minister of Finance Mihály Varga emphasised that he is now also a supporter of the stable national currency.
Weakening forint despite the good news
Although the level of 383 per euro is not dramatic compared to the previous ones, the forint still weakened. However, after such strong state support, such a reaction would not really be expected, napi.hu writes. Perhaps this is exactly the problem: those who bought a lot of currency in the hope of further strengthening, when it looked like the exchange rate was almost going to move in a strong direction at the level of 370, have now lost hope. The reason is that the good news did not bring strengthening either, so they are now closing the positions.
Of course, this is only one possibility. However, such a process can often be experienced with various financial or investment instruments, if the testing of a large technical level takes a long time, but in the end it is not possible to pass it, napi.hu explains.
The EUR/HUF exchange rate reached 384.20 at 2.10 PM on Wednesday.
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2 Comments
Perhaps the currency is being held for our high interest rates?
As usual, our – ehh – performance is pretty spectacular, compared to the rest of the EU.
https://www.statista.com/statistics/1320828/key-interest-rate-european-union-by-country/
Finance Minister -Mihaly Varga – reverting back in time pre the Covid arrival in Hungary February 2020, that saw him Varga, being CORRECTLY criticized by those of KNOWLEDGE – in Economic, Finance and Banking, that the PATH he and the Prime Minister of Hungary – Victor Orban had chosen jointly “signed off” on, was FRAUGHT with High Risk Danger.
The Economy, of Hungary continues to WEAKEN and Vargas comments of a “Stable” currency, an IMPOSSIBILITY.
The internal forces plus the external forces on the Hungarian Economy, the Minister of Finance, dismissive in comment ALWAYS of the cataclysmic disaster our Economy is in, and WORSENING, which is likened to a FLAG on a flag pole, the wind – violently throwing it in all directions, that eventually it will snap off the flag pole, descending into the earth below.
Stability and Sustainability in the forint and the Economy of Hungary – will not be PLEASANT to witness sooner than later, that gives ALL indications – we are looking at an Economic picture of a “collapsing” Economy.