Rising in the morning as euro zone and emerging market sovereign yields fell after first-quarter “good-but-not-too-good” euro area GDP data appeased fears that the ECB might rethink its QE programme, the Hungarian currency resumed its downward path late in the afternoon as the euro gathered more strength versus the dollar, best-rated euro area sovereign yields turned around and rose again, and the Hungarian government published its budget bill for next year.
The budget plan is rich in deficit- and debt-reduction goals, but their attainability was surrounded by suspicion as also on Wednesday the European Commission, in its latest country specific recommendations, saw risks that Hungary might miss its debt reduction requirement in the medium term.
Support waned even despite Hungaryʼs relatively robust first-quarter GDP growth that according to a note from Concorde Investment could lead the central bank to stop its easing cycle at 1.50% and not go any lower.
The forint traded at 270.89 to the dollar, up from 273.51 late Tuesday. On Wednesday, it moved between 270.37 and 273.86 after an almost two-week low at 274.55 on Tuesday intraday.
It was quoted at 295.25 to the Swiss franc, down from 294.58 late Tuesday. Its range on Wednesday was 292.77 to 295.79 after a five-day low at 295.96 Tuesday intraday. Since its crash to an all-time low at 378.49 on January 15 when the Swiss central bank scrapped its cap of 1.20 to the euro, it reached the highest at 281.07 on February 26.
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