The safe haven US dollar is on the rise across the board, whilst perceived riskier currencies such as the Hungarian forint are out of favour, following a surge in the increase of coronavirus cases outside of China.
After the forint weakened versus the US dollar for a fourth straight week last week, the forint has started the new week on the back foot once again. At the time of writing the US dollar Hungarian forint exchange rate is up 0.65% at 312.60, just shy of its all time high of 313.94 reached last week.
Forint Weakens, Eyes Turn To Tomorrow’s Rate Decision
The Hungarian forint is under pressure at the start of the week amid growing anxiety over the rapidly spreading coronavirus. As the number of cases outside of China soar investor sentiment is being knocked, stemming flows into riskier currencies such as the forint and increasing flows into safe havens such as the dollar.
The number of cases in South Korea increased 20-fold in just 5 days and the number of cases in Italy has reached 152, with 3 deaths. There is plenty of potential for the figures and the impact of the virus on the global economy to get worse before it gets better.
Whilst there is no high impacting Hungarian economic data due for release today, investors will look ahead to the Hungarian central bank interest rate decision tomorrow. The notoriously dovish National Bank of Hungary is not expected to move on interest rates, which are expected to remain at 0.9%, the lowest in the region, despite inflation running at 4.7%.
US Dollar In Demand As IMF Warms On Growth
The US dollar pushed higher versus its peers across the previous week and at the start of this new week. The safe haven greenback was in demand after G20 finance ministers met over the weekend. They were presented with a sobering presentation from the IMF, which warned over the impact of coronavirus on global growth.
There is no high impacting US dollar data due to be released today. Investors will look ahead to consumer confidence figures tomorrow and GDP and durable goods data later in the week.