Trading in Europe’s financial markets kicked off in a mildly optimistic mood, however this has not given a major boost to the Hungarian forint. With no significant macro data scheduled for release either in Hungary or in major global markets, markets are likely to be driven by investor sentiment on Monday.
For most part of last week, the Hungarian forint was in a narrow range of 277 to 279 vs. the euro. On Monday morning quotes were around 278 to 278.5. The USD/HUF and CHF/HUF rates were at 210.5 and 214, respectively.
The Swiss franc has remained unusually strong (EUR/CHF rate below 1.30) despite the German Finance Ministry’s swift endeavors to curtail speculation about a potential eurozone collapse last weekend. Monday morning witnessed only a minor relief of pressure on the euro. This week’s major evening is an EU summit taking place on Thursday and Friday, with presidents and prime ministers discussing the future of the eurozone’s crisis management fund and its extension proposed by Hungary. As of last week, top decision makers were highly divided over the avenues of crisis management. Markets are quite likely to take a “wait and see" stance with sideways trends prevailing ahead of the summit; as a result a major stock market rally may not happen until January.
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