Signs of improving coronavirus numbers has boosted risk sentiment at the start of the new week, lifting the perceived riskier Hungarian Forint. The Forint is strengthening against the US Dollar after losing 5.6% of its value in the previous week.

At 09:30 UTC, USD/HUF is trading -0.45% at 336.55, as the Forint continues to pick up from its record low of 341.33 last week.

Forint Gains Could Be Capped On Political Concerns

Signs over the weekend that the coronavirus outbreak could be slowing in Europe, as containment measures appear to be working, have put the markets in a better mood on Monday. Italy reported a fall in coronavirus deaths, as did Spain. France and Germany are also showing signs of the curve flattening, whilst the US saw a slowdown in cases, although it is unclear as to whether this trend will be sustained.

The improved mood is boosting demand for riskier assets and currencies, such as the Hungarian Forint, despite data starting to show signs of the size of the hit to the global economy.

Gains in the forint could be capped amid increasing political concerns. Fears are growing the Hungarian Prime Minister Viktor Orban is using the cover of a public health crisis to stifle any remaining opposition to his rule. He can now rule by decree, with no end date.

Hungary’s government have pledged to cut funding for political parties and hike taxes on banks to increase the funds available to fight the coronavirus pandemic and rebuild the economy.

There is no Hungarian economic data due for release today. On Friday, data revealed that Hungarian retail sales skyrocketed in February. Retail sales jumped 11.3% year on year, a 17-year record as consumers stockpiled ahead of the coronavirus lock down.

Tomorrow Hungarian industrial production for February is expected to show a slight increase to 2.9%, up from 2.4%. However, this data was collected was prior to the coronavirus hit.

Safe Haven Demand Eases

The US Dollar is easing across the board as demand for safe havens ease, even ad the US braces itself for the worst week.

President Trump is considering giving more money to Americans to help them after Friday’s data showed that 701,000 US jobs were lost in March. Given that the payroll report only measured until 12th March, the worst  is still to come.