The Hungarian Forint is slumping further versus the US Dollar on Friday, hitting a fresh record low. This week the Hungarian Forint has shed 5.8% of its value against the greenback as risk aversion dominates, hitting demand for perceived riskier currencies such as the forint.
At 09:30 UTC, USD/HUF is trading +1.2% at 338.83, at the upper end of the daily range of 334.69 – 339.05. Investors continue assessing the economic impact of coronavirus and look towards the release of the US jobs report, the non-farm payroll.
Hungarian GDP to Slump 20% in Q2?
As data rolls in across the globe revealing the initial economic hit of coronavirus, investors continue to sell out of riskier assets and currencies, such as the forint. Today data from the Eurozone, Hungary’s largest trading partner has been dismal sending fear through the financial markets.
The Eurozone service sector PMI dropped to a worse than expected 26.4, down from 28.4 in the earlier reading. Service sector activity dropped across the board and in Italy, activity was almost at a standstill at just 17.4 on the index. The level 50 separates expansion from contraction.
These dismal figures come as a warning to Hungary after economic research institute GKI forecast that Hungary’s GDP could plunge 20% in the second quarter of this year, amid the suspension of services and production in the vehicle industry.
Investors have completely ignored better than forecast Hungarian retail sales data. Official data showed that retail sales jumped 11.3% in February. This was well ahead of 6.2% forecast. However, given that this was from before the coronavirus outbreak the data is considered out of date.
100,000 Job Losses Forecast in NFP
The US Dollar is on the rise as data from the US revealed very worrying signs over the health of the US economy. Yesterday the US claimant count showed that 6.6 million people signed up for unemployment benefits in just one week. The total is now 10 million across two weeks.
Today investors will look ahead to the US non-farm payroll report. Analysts are expecting 100,000 job losses to be reported. This figure is much lower than the jobless claims figure because it only measures up to 12th March. The first lock down in the US as California on 20th March. Therefore, March’s data won’t show the real impact of the coronavirus outbreak. Investors will need to wait for April’s figures.