The Hungarian forint continues to sink to fresh record lows on Thursday. Broad US dollar strength and escalating concerns over coronavirus have sent the Hungarian forint tumbling southward. The US Dollar versus Hungarian forint exchange rate closed the session on Wednesday 2.1% higher at 322.85.
At 09:45 UTC USD/HUF was trading up 1.6% at 329.66. This is slightly down from the record high of 331.54 reached earlier in the session.
US Dollar Demand Increases
The US dollar continues to surge higher across the board on Thursday as investors seek out the safe haven properties of the world’s reserve currency. Investors are selling out of other assets to hoard dollars in anticipation of a prolonged coronavirus pandemic. Whilst policy makers across the globe have acted with measures of support, so far, they have been unable to stem the flight to the US dollar.
Most recently, Trump has approved legislation to the tune of $100 billion ordering free coronavirus testing and mandate paid sick leave for some, in an effort to limit the damage from coronavirus
The US stock market finished a further 5% lower in the previous session and is pointing to a drop on the open again today, albeit a much smaller decline of “just” 1%.
There are a few US data points this afternoon, including continuous jobless claims. However, these are not expected to attract too much attention.
Hungarian Central Banks Adds Supportive Measures
The Hungarian Forint is being dumped by investors as they continue to rotate out of riskier assets and currencies into the US dollar.
Like other central banks across the globe, Hungary’s central bank is taking action to shore up the economy. The National Bank of Hungary has urged domestic banks to introduce a moratorium on household loan repayments, given the unique circumstances that coronavirus has brought.
So far, this is a request. However, the central bank has said that if it is not adhered to it will be passed into law. This would at least take the pressure off some households as they face job losses and reduced income owing to the coronavirus outbreak..
Interest rates in Hungary are currently the lowest in the region at 0.9% whilst the overnight deposit rate is -0.5%.
