USD/HUF: Hungarian Forint Slips After Jumping 1.3% In Previous Session

The Hungarian forint is edging lower versus the US dollar in early trade on Wednesday. After rallying 1.3% versus the greenback in the previous session the forint is giving back some of those gains.

At 09:30 UTC, the forint is -0.25% at 303.70, trading approximately in the middle of its daily range of 304.14 – 302.70.

USD/HUF: Hungarian Forint Pares Gains Despite Stronger PPI

The forint is trending lower in line with the euro on Tuesday after gaining 2.3% versus the greenback over the past 10 day. In the previous session the forint advanced even as the manufacturing PMI declined, almost stagnation. Meanwhile today, the forint is easing despite producer price index jumping 3.8% versus expectations of a 2.6% increase. The producer price index measures inflation at wholesale level. A strong PPI reading usually indicates and strong uptick in consumer level inflation l=further down the line, lifting a currency.

However, the forint is shrugging off the data trading on the back of sentiment and growing expectations that coronavirus could hit the European economies hard. Up until now, investors have been fretting over the impact of coronavirus on the Chinese economy and on the US. However, with the number of cases in Europe on the rise, the economic implications will be grave, as the OECD warned yesterday.

Dollar Eases After Steep Sell Off

The US dollar was moving cautiously higher in early trade after a steep sell off across the broad in the previous session. Yesterday the dollar was under pressure as investors priced in a rate cut from the Federal Reserve. The Fed was then joined by the BoE and the BoJ pledging stability to their economies in the face of coronavirus disruption. US manufacturing PMI also showed the coolest rate of growth in 6 months, unnerving investors and revealing the initial impact that the coronavirus outbreak is having on the economy.

Today there is little on the US economic calendar to attract investors’ attention. Instead they will look ahead to tomorrow’s ADP private payroll figures and the ISM non-manufacturing data ahead of Friday’s all important US non-farm payroll release. Further signs of weakness in the data, could send the dollar sharply lower.

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