Economy 14 February 2007, 5:04pm

Hungary forint firms after Fed chief speech, local GDP, CPI data

Portfolio

Hungary's forint firmed to 252.50 - which proved to be a key resistance lately - to the euro in the afternoon session on Thursday, impacted by Federal Reserve Chairman Ben Bernanke's testimony to the Senate Banking Committee in Washington today. He said declining energy and commodity prices were likely to push inflation lower, though it would take a while before the Fed relaxes its guard. The speech made the lira and the rand firm a tad, while Poland's zloty and the SKK stagnated today and the CZK eased a touch versus the euro. The USD started to ease over increased rate cut expectations in the US and so the HUF appreciated against the dollar to around 192 from around 194 in morning trade.

eurhufcomp

HUF opened at around 253.50/80 vs. EUR today and pussyfooted around almost throughout the day. Q4 GDP data released in the morning did not had an immediate impact on the market. Longer yields on the fixed income market, however, dropped by 8-15 bps, compared to late Tuesday levels.The Central Statistics Office (KSH) also released January CPI data today, but the leap (to 7.8% yr/yr from 6.5% in Dec) may not be enough for the central bank's Monetary Council to raise rates further from the current 8.00% level.