The Hungarian Forint is slipping lower versus US Dollar, paring some of the gains from the previous session. The Hungarian Forint settled on Tuesday at 320.33 after rallying 1.1% and hitting its strongest level in two weeks.
At 09:15 UTC, USD/HUF is trading +0.4% higher at 321.44. This is approximately mid-way between its daily trading range of 319.92 – 322.35.
Hungarian Car Makers To Restart Production
The Forint is edging lower on Tuesday as amid a broad increase in risk aversion across global market as global data showed the dire impact that the coronavirus lock down is having on the world economy.
News that Hungary’s largest car manufacturers are planning to restart production gradually after weeks of shutdown is helping to underpin the Forint. Hungary’s economy is heavily dependent on the vehicle manufacturing sector, which had stopped production amid the coronavirus lock down. Germany’s Daimler and Japan’s Suzuki have both said that they will restart production in a limited capacity.
Data today showed that Hungarian industrial production increased by 4.1% in February, before the coronavirus outbreak hit the global economy. Economists expect the economic effect of the shut down to peak in the second quarter of this year in Hungary.
The Forint advanced in the previous session even after the International Monetary Fund projected that the Hungarian economy will contract by 3.1% this year. This was down from the previously expected 3.3% growth that the IMF had forecast for 2020.
US Retail Sales In Focus
The US Dollar is pushing higher after President Trump rekindled hopes of a speedier economic recovery in America, with some states potentially starting to reopen for business prior to May 1st.
Today investors will look towards US retail sales data. Analysts are expecting US retail sales to decline -8% month on month in March, down from -0.5% decline in February. This would be the biggest drop on record after the coronavirus lock down saw consumption plummet. With unemployment expected to reach 10% of the workforce, retail sales could struggle to recover even after the lock down is eased. A weak reading could boost demand for the safe haven US Dollar.