The forint strengthened to such an extent that its exchange rate fell by 8 against the euro and 13 against the dollar within a day. With this, it managed to outperform some in the region, for example, it reached its peak of almost 4 weeks against the Polish zloty.
The exchange rate of the euro fell from HUF 413,59 at seven o’clock in the morning to HUF 407,88 on Thursday evening, and during the day, it fluctuated between HUF 406,60 and HUF 414,35, writes 24.hu. According to Forbes, on October 12, one euro was still worth HUF 432. However, since then, the forint has gotten stronger. After a low of 415, forint approached the level of 408 against the euro, reports hvg.hu. Against the dollar and the Swiss franc, the exchange rate of both was around HUF 415 on Friday evening.
Against the dollar, the forint strengthened even more – by 2,8 percent – on Friday evening. If the forint could get stronger well below the level of 415 against the US currency, then we could even talk about a one-month forint peak. Apart from that, the forint exchange rate against the euro targeted the level of 409, which could be possible because of the weakness of the dollar and the favorable overseas stock market sentiment.
The exchange rate movement of the forint on Friday clearly followed the movement of the euro-dollar cross exchange rate. The dollar weakened against the euro to the level of 0,98, which is its weakest level within the day, writes Portfolio. In addition, the weakening of the dollar on Friday afternoon was also good for the forint. The forint exchange rate against the euro fell below the level of 410 after 5 AM on Friday. As a result, the domestic currency is slowly returning to the levels seen in the morning, when the euro/forint exchange rate was 408.
The weakness of the dollar is visible mostly in the USD/HUF exchange rate. Here, it peaked at the 428 level within the day, compared to that, the exchange rate is already 10 units lower.
In his interview with Forbes, Dániel Móricz, Investment Director of Hold Fund Management shared his thoughts about a possible intention to streghten the exchange rate of the forint. In the very long term, the forint moved roughly in line with the other currencies of the region, although the rate of devaluation was slightly faster in the case of the forint. However, in the spring and in October, it separated from the Polish zloty. Due to the uncertainty surrounding EU funds, as well as this forced tightening intention of Hungarian economic policy, Dániel Móricz does not think there is a determined tightening intention. Moreover, he does not see the intention to strengthen the forint exchange rate, either.
Source: 24.hu, Portfolio, hvg.hu, Forbes