Hungarian forint expected to pick up pace – BAML

By FXStreet FXStreet (Edinburgh) – The Hungarian currency is seen outperforming its EM peers in the medium term, suggested analysts at BAML.

Key Quotes

“Disappointing 2Q GDP at 2.7% yoy led us to revise down our 2015 GDP forecast to 3% from 3.5%, but growth should still be trending relatively close to 3% through 2016, in our view”.

“The statistical office attributed to the downside surprise to the agriculture sector. Meanwhile, robust industrial activity, solid consumption, and strong net exports were likely the key driver of GDP”.

“For investors, we stay long via short RON/HUF and a short PLN/HUF position. The NBH’s decision to end its rate cutting cycle is a significant positive and should help reverse the uptrend in EUR/HUF since 2012”.

“We retain our long-term positive bias on Hungary given the prospect of rating upgrades in 2H. We maintain our bullish HUF bias, supported by the 10%+ of GDP in current and capital account surplus”.
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Source:: FX Street