The Hungarian Forint is resuming losses versus the US Dollar on Tuesday. After briefly strengthening on Monday, the Forint is resuming its downwards trajectory on Tuesday. The Hungarian Forint has weakened versus the green back in 5 of the past 6 sessions.
At 09:15 UTC, USD/HUF is trading 1% higher at 327.76. This is at the upper end of the daily trading range of 322.91 – 328.28 and the highest trade level for 9 days amid risk off trading.
Riskier Forint Drops
The mood in the market soured on Tuesday meaning that investors sold out of riskier perceived currencies such as the Hungarian Forint, favouring safe havens such as the US Dollar.
There were several factors creating today’s risk off sentiment. Reports that North Korea’s leader Kim Jong-Un was critical in hospital after heart surgery unnerved investors. This is because it raises concerns over succession in the nuclear rogue county.
An unprecedented drop in the price of oil has also added to risk aversion. Overnight, West Texas Intermediate (WTI) for May delivery went negative. This means that oil producers needed to pay to sell their oil for today’s delivery. This happened is because storage for oil, particularly in Oklahoma in running very low. The plunge in oil prices could see a lot of companies get hit and they may start to fail. The unprecedented market movement has knocked demand for riskier assets and currencies.
The Hungarian Forint found support in the previous session after the European Commission approved a HUF 350 billion (€5.6 billion) emergency relief pay-out for the coronvirus hit. This was more than Italy received (€2 billion) despite Hungary having a sixth of the population of Italy and with an estimated 172 fatalities from covid-19, compared to 23,660 fatalities in Italy.
Home Sales & Corporate Earnings
The safe haven US Dollar is pushing higher across the board on Tuesday. Investors will now look ahead to US corporate earning data for clues as to the economic consequence of the coronavirus lockdown.
US home sales data will also be in focus as social distancing rules mean buyers and sellers are being kept apart. Analysts expect home sales to slump -8.1% in March. A weak figure could boost the US Dollar.