The Hungarian forint continues to slide, reaching another record low against the euro this morning in a new wave of selling following dismal manufacturing figures, combined with a global risk-off mood.
The manufacturing purchasing managers’ index dropped to a lower level than seen in the global financial crisis and printed 29.1 compared to the expected 47.0 and down from 50.1 in the previous month. A reading of 50 separates a reported contraction from expansion.
Compared to the global financial crisis times, Hungary now has a more open economy that is integrated with global trade. This has likely played a big part in the difference in the PMI readings then and now, as the current disruptions to the value chains impact manufacturers to a higher extent. In terms of hard data, the Hungarian Central Statistical Office will only release March’s industrial production data in May, so it will take some time to fully assess the severity of the situation.
The US dollar remains well bid today as safe haven demand continues on day one of the second quarter. Donald Trump’s comments from last night stating that the death toll in the US alone could reach 110,000 – 240,000 sent shivers down investors’ spines and made for a broader risk off mood in markets today.
HUF continues to break through record low against the euro while also weakening against the dollar
The Hungarian forint holds worst spot return against the USD in the EM space – 1 day window