Investors are beginning to calm down after panicky mood swept through markets late on Wednesday and Thursday. Currency markets are also showing signs of correction, which let up the pressure on emerging market currencies too. Hungary’s forint eased to 300 versus the euro but on Friday morning it has gained some distance southbound from this psychological level.
Hungary’s newly proposed tax measures – if approved – could improve the budget balance by up to 100 billion forints, the National Economy Ministry responded to state-owned newswire MTI’s inquiry on Monday.
Global investor sentiment has greatly improved since Thursday afternoon, which helped Hungary’s forint continue its fast appreciation versus key currencies. The strength of the HUF, however, may also have to do with indications that the scaling back/phasing out of the Federal Reserve’s asset purchase programme will not be as fast as the market started to price in. And so the market shifts observed over the past few weeks have begun to reverse. In this environment the forint’s firming gained momentum and the Hungarian currency briefly touched the 290 mark versus the euro. This change came hand in hand with a considerably decline in local government bond yields. The appreciation of the HUF, however, petered out in the morning and it started to give back its gains later in the day.