USD/HUF Extends Gains from Last Week ahead of Christmas

USD/HUF extended gains at the start of the holiday week on the back of solid US macro data released on Friday. The USD hit two-week highs against a basket of other major currencies after US final GDP estimate, PCE inflation and the consumer sentiment index came in line with market consensus and added to the case that the Fed will probably keep the target range for the federal funds rate intact in the near term.

The pair seemed to have retained the upside momentum after sales of new single-family houses in the US were reported to have risen 1.3% to a seasonally adjusted annual rate of 719 000 in November, recovering from a 2.7% decrease in October, as low mortgage rates continued to support local housing market.

In a recent speech, the US President Donald Trump said that the world’s two most powerful economies would “very shortly” sign their “Phase One” trade agreement. The deal was announced earlier in December as part of a bid to end the over 17-month long trade friction between the two countries, which has hurt global economic growth.

Meanwhile, the National Bank of Hungary reported last Friday that the country’s current account deficit had shrunk to EUR 230.1 million during Q3 of 2019 from EUR 586.3 million in Q3 of 2018.

The numbers followed the central bank’s monetary policy decision. The NBH left its benchmark interest rate intact at record low 0.9% on December 17th, after annual inflation in the country went up to 3.4% in November. The benchmark has been at the record low level since May 2016. As a result, last week HUF pared gains against USD, achieved between November 28th and December 13th, with the pair rebounding from 293.900 (December 13th low).

The US Dollar Index was little changed at 97.69 in late Asian trade on Tuesday, after reaching a two-week high of 97.82 yesterday.

From a macroeconomic perspective, the United States and Hungary are not scheduled to release any relevant reports today.

USD/HUF was up 0.04% to 298.790 in late Asian session on Tuesday.


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