The weaker-than-expected purchasing manager index in China and the fact that rating agency Standard & Poor’s said today it saw more than a one-third chance that it would downgrade Japan's sovereign ratings, have worsened global sentiment on early Tuesday, but Hungary’s forint was left unfazed during the morning. The PMI print for France turned out better than expected while that of Germany surprised on the downside and that has already taken its toll on the HUF, which weakened to north of 300 versus the euro, a new 2-week low. Before the Hungarian central bank’s rate-setting meeting EUR/HUF was sent to 303 on a faulty headline run by Bloomberg, but after the 25-bp (in line) rate cut the forint has regained its composure and went back to below 300.
HUF is gaining already - 14:23
On the news that the Monetary Council cut the base rate by 25 bps as expected, the forint started to firm. Some London-based analysts claimed that a 50-bp cut was not out of the question and for them the 25-bp reduction suggests that the NBH moves ahead with monetary easing cautiously. Around the announcement of the rate decision EUR/HUF was quoted at around 301 but by now the forint firmed to below 299.
Wrong headline and boom... - 14:07
Bloomberg has published a headline at 13:54 saying Hungary’s central bank lowered its key policy rate to 1%. This would have corresponded to a 400-basis-pint cut.
In the minutes before the central bank’s rate-setting meeting the forint has started to ease. It has weakened to 302.50 versus the euro from around 300, but shortly after it has corrected back.
According to our information, it was a faulty Bloomberg headline saying Hungary’s base rate was slashed to 1% which caused this disruption.
HUF south of 300 to EUR again - 13:05
The forint’s depreciation versus the euro has stopped and it is now back under 300, one hour before the central bank’s rate meeting.
Charting is displayed using TradingView's technology, a platform, where you can build advanced charts,
spot upcoming trends in the stock screener, and find inspiration in multiple trading ideas
