The Hungarian Forint is advancing versus the US Dollar, paring losses from the previous session. The Hungarian Forint slipped 0.7% against the greenback on Tuesday after the State Bank of Hungary voted to keep rates on hold.
At 09:30 UTC, USD/HUF is trading -1.5% at 324.94, following an agreement between US congressional leaders on a $2 trillion stimulus package.
US Dollar Drops On $2 Trillion Rescue Package
The safe haven US Dollar has fallen lower in early trade on Wednesday after a breakthrough in the Senate. US lawmakers have struck a $2 trillion stimulus agreement to provide economic relief to American businesses and individuals hit by the fallout from the coronavirus pandemic. The very measures that the government is putting not place to protect the US public from the virus is creating a demand shock in the US economy
The $2 trillion deal is due to be formally voted on later today and is set to be the biggest congressional bailout in US history. It dwarfs the $800 billion Obama package agreed 5 months after the financial crisis.
The deal has boosted risk sentiment across the financial markets. The US stock market surged in the previous session with the Dow Jones jumping 11.4% in its biggest one-day gain since the 1933 Great Depression.
Markets across Europe have extended gains this morning as risk sentiment remains firm.
State Bank of Hungary Keeps Rates On Hold
The Forint is advancing on Wednesday as investors snap up riskier asses and currencies.
The Forint declined in the previous session after the monetary council of the Hungarian central bank decided to keep the central bank base rate at 0.9%. Rates have remained unchanged since last March.
The central bank will publish its latest inflation report on Thursday. However, it released the main forecasts from the inflation report on Tuesday. The bank lowered the 2020 inflation forecast owing to the coronavirus effect. It now expects inflation to be to 2.6% -2.8%, down from 3.5% in the previous inflation report released in December. Despite the decline, the SBH said it sees inflation climbing back to3.4% – 3.5% in 2021.