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3 Nov 2015
EUR/HUF could appreciate further in the long run – BAML
FXStreet (Edinburgh) - In the view of BoA Merrill Lynch Global Research, the Hungarian forint is seen gathering further traction in the longer term.
Key Quotes
“Downside risks to GDP have increased after soft summer data, and in view of the Volkswagen crisis and the China slowdown. We lowered our GDP projections, but to still decent rates of 2.8% for 2015 and 2.5% for 2016 from 3% and 2.9%, respectively”.
“Consumers continue to benefit from several tailwinds (debt reduction, lower interest rates and oil prices), and business confidence is still holding up well, supporting GDP growth above potential”.
“But these are probably not enough to sustain the 3%+ pace of GDP expansion in the coming year”.
“We recently closed our long HUF positions due to downside risks to growth and interest rates. However, we continue to see long-term appreciation pressures on balance of payments strength. European Central Bank QE also remains supportive”.
Key Quotes
“Downside risks to GDP have increased after soft summer data, and in view of the Volkswagen crisis and the China slowdown. We lowered our GDP projections, but to still decent rates of 2.8% for 2015 and 2.5% for 2016 from 3% and 2.9%, respectively”.
“Consumers continue to benefit from several tailwinds (debt reduction, lower interest rates and oil prices), and business confidence is still holding up well, supporting GDP growth above potential”.
“But these are probably not enough to sustain the 3%+ pace of GDP expansion in the coming year”.
“We recently closed our long HUF positions due to downside risks to growth and interest rates. However, we continue to see long-term appreciation pressures on balance of payments strength. European Central Bank QE also remains supportive”.