Comment:The Hungarian forint has weakened significantly since the summer, off about 19% against the embattled Euro and –27.7% against the US dollar, at its long term mean against the latter and as close as it’s been to the record high 317.50 of April 2009 against the former. It operates as a managed float, the current exchange rate regime introduced in 2001 where the upper limit is 324.00. Weekly and monthly closes above 310.00 suggest a test of its limit and probably a subsequent devaluation, where the central rate could be around 315.00.

A weekly close below 295.00 eases immediate upside pressure but only below 285.00 would we be forced to review.

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