After a shaky start, the US Dollar is clawing back losses. The US Dollar Hungarian forint exchange rate is trding 0.5% higher on Thursday as investors digest the World Trade Organisation (WHO) announcing a pandemic and President Trump’s travel ban.
At 09:15 UTC, USD/HUF is trading 0.5% higher at 300.16. This is towards the upper end of the daily range of 297.02 – 300.52.
Hungarian Forint Declines Ahead of ECB
The Forint is edging southwards after the minutes from the Hungarian National Bank’s meeting, released on Wednesday, showed that March’s inflation report will determine the next step for monetary policy and the size of the next step needed. The minutes come from a monetary policy meeting where policy makers voted unanimously to keep interest rates on hold.
The Hungarian central bank is the most dovish bank in the region. However, recent data shows that inflation is slowing. Consumer prices in February increased just 0.3% month on month, down from 0.9% the month before.
Coronavirus is also expected to take its toll on the Hungarian economy after the Government declared a state of national emergency closing universities and banning large gatherings to help contain the spread of the virus. So far Hungary has 13 cases.
Attention will now turn to the ECB, which is due to give its rate decision today.
US Dollar Advances As US Stock Markets Reel
The US Dollar was edging higher on Thursday even as US stocks look set for another day of carnage on the markets. The WHO declared a pandemic, which added another layer of fear to already very scared investors. The pandemic announcement doesn’t mean any automatic change to policy response. Each country is responsible for their own policies on how to best deal with coronavirus. However, the use of the word pandemic hit risk sentiment overnight.
Following on from the WHO’s pandemic announcement, President Trump announced a 30-day travel ban to and from mainland Europe. He also announced a package of measure to help support individuals and small businesses through the economic headwinds that coronavirus will bring. There was still no mention of the payroll tax relief, which will most likely be awaiting sign off from Congress.
There is no high impacting US data to be released today. Investors will remain focused on coronavirus headlines.
