The US dollar Hungarian Forint exchange rate closed the previous week at approximately the same level that it had started the week. The pair was edging higher at the start of the new trading week. Looking across the month of November, the dollar rose 3.1% versus the Hungarian currency. November was a strong month across the board for the US dollar as it rallied versus all its major peers. Today the Hungarian Forint is advancing.
The dollar had a strong November, following a third and final interest rate cut from the Fed at the end of October. Despite the ongoing US – Sino trade dispute and slowing global economy, the Fed insisted that no more monetary policy easing was required.
Trade has remained in focus across the past month and is expected to hog the spotlight going forwards. Last week Trump signed the Hong Kong bill into law, angering Beijing. Over the weekend, China insisted that rolling back of the trade tariffs must be included in the phase one trade deal. These two points could dampen expectations of a trade deal being agreed soon. Trade headlines will continue to drive movement in the dollar.
Data last week was broadly positive. US GDP for the third quarter was revised higher to 2.1%, up from 1.9%. There are plenty of data points for investors to digest this week. The most eagerly awaited be the Friday’s jobs data. Today investors will focus on US ISM manufacturing numbers. Analysts are expected the contraction is the sector to have eased slightly. Upbeat data would support the Fed’s theory that the US economy is holding up, pushing back expectations for a rate cut.
Hungarian Manufacturing Data Up Next
The Hungarian Forint rallied versus the US dollar on Friday following solid wage growth data. The Hungarian currency gained 0.5% against the greenback after official data showed that wage growth remained in double digit territory in September at 11.8%. The was up from August’s reading of 11.5% and well ahead of analysts’ expectations of 11.4% growth.
In addition to strong wage growth, employment rose by 0.14% since the start of the year. Analysts expect the tight labour market and double-digit wages growth to remain for the rest of the year. Strong wage growth is considered an inflationary pressure which can lead to the central bank tightening monetary policy and hiking interest rates. As a result, strong wage growth boosts a currency.
Today the Hungarian Forint could come under pressure as investors look towards Hungarian Manufacturing pmi data.