The Hungarian forint weakened for a second straight session versus the US dollar on Wednesday. The US dollar Hungarian forint exchange rate advanced 0.15% to close the session at 297.85. The forint is picking up against the dollar heading into Thursday.
The safe haven US dollar advanced in early trade on Wednesday following Iran’s missile attacks on US military bases in Iraq. However, the dollar pulled back from session highs after President Trump’s press conference. Trump confirmed that here had been no casualties and that damage had been negligible. Trump stated that “Iran appears to be stepping down” which he added was a good thing fir all those involved. As risk sentiment improved demand for the dollar declined.
The dollar also found support from fundamental in the previous session. The ADP private payroll report showed that 202,000 new private jobs had been created in December in US. The was significantly ahead of November’s 67,000 and analyst’s expectation of 160,000. The ADP report is strongly correlated to the non-farm payroll report, the most closely watch macroeconomic release of the month. The solid ADP data bodes well for Friday’s non-farm payroll report.
Today investors will continue to monitor the situation in the Middle East. Any sign of another flare up could boost the dollar. Attention will then begin to turn towards Friday’s non-farm payroll release.
Budget Balance Up Next
The Hungarian forint was on the back foot again on Wednesday after industrial production data disappointed for a second straight month. Hungarian industrial production increased 5.7% year on year, below the 7.8% analysts forecast on a monthly basis production fell by -1% in November following a -0.4% month on month decline in October. Questions are starting to be raised as to whether the recent weaknesses in the sector is a short-term hiccup or the start of a new trend? The weak data dragged on demand for the forint.
This week has been a bust week for economic releases, and they haven’t stopped yet. Hungarian budget balance is due to be released today and the final i=high impact data piece to be released this week.