Forint Drops for Third Day as Hungarian Industry Output Plummets
The forint weakened for a third day and Hungary’s five-year bond yields fell after data showed the nation’s industrial output plunged the most in three years in November, adding to speculation of further central bank easing.
Hungary’s currency depreciated 0.3 percent to 292.30 per euro by 4:35 p.m. in Budapest. Yields on the government’s 2017 bonds dropped five basis points, or 0.05 percentage point, to 5.893 percent.
The central bank has cut interest rates every month since August to help Hungary exit its second recession in four years. Industrial production fell a workday-adjusted 6.9 percent in November from a year earlier, the steepest decline since November 2009, and fell 0.1 percent from the previous month, the statistics office in Budapest said today. Economists had predicted a 3.5 percent drop, according to the median of 10 estimates in a Bloomberg survey.
“The much worse than expected industrial output data may give further ammunition to doves in the Monetary Council for further easing,” Imre Kerekgyarto and Karoly Bamli, Budapest- based currency traders at Commerzbank AG, wrote by e-mail today, adding that the forint weakened after the publication of the data.
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