The Hungarian forint snapped a three-day winning streak versus the US dollar on Thursday. USD/HUF closed 0.7% higher at 300.51. The forint is extending those losses in early trade on Friday. Across the week, the forint and the US dollar have been well matched with no gains or losses recorded.
The US dollar was in demand across the board on Thursday after data showed that US retail sales climbed again in December. Data from the US Commerce Department showed retail sales increased for the third straight month, climbing 0.3% in December compared to the month previous. Retail sales data for November was also revised higher to 0.3%, up from 0.2%.
With solid job creation, wage growth at 2.9% and consumer confidence at its highest level since May households have been spending well across December. The data supports the idea that the US economy grew moderately heading towards the end of the year.
The Fed are unlikely to adjust their outlook on this data. The US central bank has said that policy is appropriate for now. This data, which is neither too hot nor too cool, supports their view.
Today the US economic calendar will remain in focus with several mid-tier macro-economic releases, such as industrial production, housing starts and consumer confidence data. Strong readings could help push the dollar higher.
Forint Eases After 3 Sessions Of Gains
The forint advanced versus the US dollar at the start of the week, thanks to Hungarian inflation beating forecasts at 4%, a seven-year high, and after Hungary’s National Bank indicated that it expected surplus liquidity levels in the economy to ease in the coming quarter.
There is no high impacting data due to be released from Hungary today, and with risk sentiment taking a back seat following the signing of the US – China trade deal, the USD/HUF could be more dollar driven over the coming session. The Hungarian forint has failed to benefit from upbeat Chinese data which is supporting the broader market.
With little else to focus on front investors could look to eurozone inflation data. This is relevant because Europe is Hungary’s principal trading partner.