The Hungarian forint was mostly unchanged against the US dollar this morning after a strong sell-off earlier this week, following Hungarian central bank’s dovish policy meeting on Tuesday.
The Hungarian National Bank left interest rates unchanged at a record low of 0.9% amid rising inflation rates that reached 3.4% in November — well above the NBH’s target of 3%.
The central bank also increased Hungary’s GDP growth forecast from the previous 3.3% to 3.7%. Nevertheless, the NBH remains one of the most dovish central banks in Central Europe after it launched its bond purchase programme earlier this year. The bank has accumulated bonds worth about 140 billion forints since September.
The interest rate decision came at a time of high selling pressure on the forint that reached an all-time low of 308.19 against the US dollar in October. As of 8:35 a.m. London time, one US dollar bought 297.60 forints.
In the United States, the US House of Representatives impeached President Trump on charges of obstructing Congress and abuse of power, but the news has failed to decisively move the greenback so far.
Markets are now awaiting the Philly Fed Manufacturing Index from the US, due to be released at 1:30 p.m. London time today. The Index is expected to fall to 8.1 points in December, down from 10.4 in November. There are no market reports of note from Hungary today.
From a technical standpoint, the recent downturn in the USD/HUF pair faced some buying pressure near the November lows of 293.45, with the bullish bias likely to persist in the coming period. To the upside, notable resistance levels include the 300.00 round-number level, followed by the November 28 high of 306.26.
