The Hungarian forint weakened versus the US dollar on Tuesday. The US dollar Hungarian forint exchange rate closed 0.35% higher at 296.12. The pair is advancing again in early trade on Wednesday.
The US dollar strengthened in the previous session as investors digested stronger than forecast US economic data and as scepticism grew over the US — China trade agreement. The absence of clarity surrounding the first phase trade deal is starting to unnerve investors. The lack of details on the deal is making it difficult for investors to analyse its scope.
Data was supportive of the dollar in the previous session. US manufacturing production increased by more than expected in November at 1.1% versus 0.7% forecast. This was a significant increase from October’s -0.7% decline. The sector, which accounts for around 11% of the economy, is showing signs of stabilizing after being weakened by the 17-month long US – China trade dispute.
Today there is no high impacting US data for investors to digest. Attention could swing towards US President Trump’s impeachment trial, but this is unlikely to have a significant impact on the US dollar. In the House, the Democrats are expected to have sufficient votes to impeach Trump. However, the Senate is unlikely to produce the two thirds majority that is required to oust a President.
Hungarian GDP Forecast Lifted
The Hungarian forint was on the back foot in the previous session. The Hungarian central bank left interest rates on hold, as market participants had widely anticipated. The central bank also maintained its loose monetary policy stance. The HNB said that it saw inflation risks as balanced again as recession fears in the euro zone subside.
The Hungarian National bank also raised its 2020 GDP forecast to 3.7% growth, up from 3.3% previously forecast. Central Europe’s most dovish central bank also said that it would extend its corporate bond buying programme, which is began in July to help local companies get funding.
There is no high impacting Hungarian economic data due for release today. Instead forint investors will look to the eurozone inflation and business sentiment figures.