USD/HUF: Hungarian Forint Consolidates Gains, NFP Up Next

The Hungarian forint is holding steady versus the US Dollar in early trade on Friday, after strengthening in the previous session. The USD/HUF exchange rate closed on Thursday -0.55% lower at 299.88, after hitting a fresh 7 week low of 299.26.

US Dollar Eyes Non-Farm Payroll

The US dollar has been under pressure this week following the Federal Reserve’s emergency 50 basis points rate cut on Monday; a surprise move to shore up the US economy in the event of coronavirus slowing US economic growth. Investors are fearful that the Federal Reserve could cut again in the coming months.

Today attention will turn to the US non-farm payroll data. The US jobs report is the most closely watched US release of the month. This is because it is so closely watched by the Federal Reserve. Both the Fed and market participants will want to see whether the coronavirus outbreak is affecting hiring decisions yet in the US.

Analysts are expecting 175,000 jobs to be created in February. This is down slightly from January’s bumper 225,000, but still a solid reading. The unemployment rate is expected to remain steady at 3.6%, whilst average wages are forecast to increase 0.3%, up from 0.2%.

This week the ADP private payroll numbers were stronger than forecast and the employment component of the ISM non-manufacturing report increased. These are considered lead indicators for the non farm payroll and therefore point to an upbeat reading. Any sign of weakness in the data could reinforce fears that the Federal Reserve will cut rates again, sending the Dollar sharply lower.

Hungarian Forint Steady After Industrial Production Increases 2.4% YoY

The Hungarian forint is holding firm in early trade following an improvement in industrial production data. According to official stats industrial production increased 2.4% on an annual basis in January. This was up from a -1.2% decline in December. However, it was still weaker than analysts’ estimates of 3.9% annual growth. On the one hand the rebound from December’s weakness is an encouraging sign; however, with growing fears that coronavirus will cause disruptions there could still be more weakness to come.

There is no further Hungarian data this week. Investors will look ahead to Monday’s Budget balance and any coronavirus updates.

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