Emerging markets foreign exchange is overall well positioned to benefit from an anticipated weakening of the US dollar and a stronger risk backdrop in which the forint and the zloty “should do well”, London-based emerging markets analysts have said, envisaging EUR/HUF at 235 in less than a year from now.
Bank of America-Merrill Lynch said in its latest revised forecast that it now looks for “generalized USD and JPY weakness” over the remainder of 2009. The catalyst for the change in the forecast is the receding likelihood of a material correction in equity prices.
“In our view, EMEA FX is overall well positioned to benefit from the weaker USD environment and the stronger risk backdrop that now constitutes our baseline scenario … there will be more potential in Central Europe, as these currencies still have a long way to go to return to their pre-crisis levels (and) the HUF and the PLN should do well under these conditions”.
In a foreign exchange forecast table attached to the note, Bank of America-Merrill Lynch suggested it expects EUR/HUF at 264 in the third quarter of this year against the old forecast that called for 315, and that it sees the forint appreciating all the way to 235 by the second quarter of 2010, instead of the 275 level the bank had previously anticipated.
“Bank of America-Merrill Lynch suggested it expects
EUR/HUF at 264 in the third quarter of this year
against the old forecast that called for 315, and
that it sees the forint appreciating all the way to
235 by the second quarter of 2010, instead of the
275 level the bank had previously anticipated.”
…which goes to show how completely useless these
forecasts (and forecasters) are.
Who really gives a crap where the forint is going to be a year from now? These three-a-day currency exchange forecats are a colossal waste of time. Useless snake oil peddled by the likes of such discredited dinosaurs as B of A Merril Lynch.
Some of us rely heavily on the long term forecasts of these banks in order to set rates for pricing in foreign markets. Last year when the forint strengthened so far so fast it cost tourism companies who price in Euro and Pounds a lot of money.
For us this forecast is terrible news.
Okay, time to move over to the USA then, as I hear the USD is falling against all currencies, so that must be the good news some of the local speculators have been waiting for, right?
Josey. Hello! You have assumed the forecasters will be correct?
If you would have taken the time to read regularly
other articles regarding the foreign exchange market you (and the tourist industry) might of learned something to your advantage.
Andras Simcor the governor of the Hungarian National bank (MNB) was pouring a small fortune of IMF/EU loan money (paid in euros) into buying the forint. Consequently the “sudden” move on the forint was perpetrated by your own “money king” and greatly effected the exchange rates in recent months.
I will try and post a bit more info on this issue, shortly, for your consideration.
Josey. cont’d:- The following is a small part of the Euro-Forint incident reported in the press (March 16,2009) to which my previous posting refers:
“Using EU subsidy money
Amid references to “all available means”, the MNB announced one concrete measure in its statement. The central bank aims to drive up the value of the forint by exchanging millions or euros of EU subsidy money into forints on the money markets. According to the theory of supply and demand, this should cause the price of Hungary’s currency to rise.”
MintaFarkas SampleWolf, just who exactly is Josey’s “own money king, Friend?” I’d be curious to know.
You can spend all your time figuring out what something or the other thing will cost 6 or 12 or 18 months from now, but most of this “research” will be futile, as the best laid-out projections frequently end up topsy-turvy.
Live a little today, guys and gals, and forget about these painful and ultimately self-destructing speculations and schemes already. What the future shall hold — nobody should really know for sure. Probably nobody can know, either.
Re-read the article again Nyalasi and you will
understand who J’s “money king” is.
If forecasters were correct all the time we would all make a fortune. (As you know they are quite often wrong!)
Hungarians have already taken your advice and spent money they haven’t got. They are up to their “necks” in debt and looking for a “patsy” upon whom they can discharge the “outstanding”!
The next Fidesz government perhaps?
FarkasWolfbane, you are not adding anything new the conversation here.
The United States of America is over US$11 TRILLION in debt. Soon to reach 12 trillion dollars… and likely much more.
So, why don’t stop the bitching about little Hungary, a country that is practically doing the same thing that its Westerns masters have tought it?