USD/HUF: Hungarian Forint Holds Steady As Average Wage Growth Slows

The Hungarian forint has traded steadily against the US dollar over the past few sessions. On Tuesday the US dollar forint exchange closed just 0.08% lower following the Hungarian National Bank interest rate decision.

Today USD/HUF is trading 0.08% higher at 311.26 at 09:00 GMT on coronavirus fears and a slightly weaker level of gross wage growth in Hungary.

Hungary’s Fundamentals In Focus

The Hungarian National Bank kept interest rates on hold at 0.9% on Tuesday, as the most dovish central bank in Europe ignores the weakening forint and the high levels of inflation. Inflation in Hungary sits at 4.7% (year on year in January), the highest level in Europe according to Eurostat. There was no surprise in the decision, the bank has been clear that it expects inflation to retreat from its 7-year high as it maintains its ultra-lose monetary policy. The forint barely budged following the announcement.

Today the forint is edging lower following data that showed a slight weakening in average wage growth in the country. Average gross wage growth came in at 13.1% in December, down slightly from November’s bumper 13.9% increase.

The focus on Hungary’s fundamental picture is set to continue tomorrow with Hungary’s unemployment level due to be revealed. Analysts are expecting unemployment to hold steady at 3.3%. Finally, GDP data is out on Friday.

Fed To Cut Rates On Coronavirus Slowdown?

The dollar was holding steady versus its major peers in early trade on Wednesday, after selling off in the previous session amid growing concerns surrounding the spread of coronavirus. Up until now the US dollar has remained resilient as the number of coronavirus cases increase, owing to its safe haven status.

However, on Tuesday Federal authorities warned over the spread of coronavirus in the US. Whilst they don’t know how severe the situation will get, they expect it to worsen.

Following this warning, the US stock markets tanked over 3% for the second straight day. The US dollar also declined as investors increased the odds of coronavirus impacting the US economy to the extent that the Federal Reserve would need to cut interest rates.

Today there is only mid-tier US housing data due for release. Investors will remain fixed on coronavirus headlines.

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