The Hungarian Forint (HUF) is pushing higher versus the US Dollar (USD) for the fourth consecutive session on Monday. At the start of the week the Hungarian Forint (HUF) was over 0.7% stronger against the greenback, although this was more of a dollar weakness story rather than owing to a change in fundamental strength in the Hungary.
At 08:30 UTC the USD/HUF is trading at 294.83, well away from the Forint’s record low of 314.00 struck just three weeks away.
US Dollar Plunges In Panic Trading
The US dollar is being hammered across the board. The US dollar plunged in the latter half of the previous week, booking its worst weekly loss in four years as investors flocked towards US bonds, pulling bond yields sharply lower and denting the greenback’s appeal.
Investors completely ignored Friday’s impressive non-farm payroll report. The Labour Department report revealed that 275,000 jobs created in February, well ahead of the 175,000 forecast. The unemployment rate also declined to 3.5% from 3.6%. The stellar report showed that the US economy was on a solid footing.
However, the number of coronavirus cases in the US escalated sharply from the end of February. Investors are panicking over how the outbreak will impact the US economy in the coming weeks and months.
The US stocks markets are expected to open around 4.5% lower amid strong risk off trading.
Hungarian Forint Looks To Inflation Data
The Hungarian forint is trading on the front foot at the start of the week, extending gains from last week. Data on Friday showed that industrial production in Hungary rebounded in January, increasing 2.4% year on year, up from a -1.2% decline in December. The increase did fall short of analysts’ expectations of a 3.9% jump.
Looking ahead, the focus will now switch towards inflation data which is due to tomorrow. Analysts are expecting inflation to slip lower to 4.3% in February, down from 4.7% the previous month. Core inflation, which exclude more volatile items such as food and fuel is expected to tick lower to 3.9%, down from 4%. Declining inflation could dampen demand for the forint as the infamously dovish Nation Bank of Hungary are unlikely to adjust policy.