The forint strengthened, poised for the best weekly advance among emerging-market currencies, and bond yields plunged on signs Hungary’s economy is rebounding from a recession amid a global recovery.
The currency gained as much as 0.8 percent and traded 0.3 percent stronger at 291.3 per euro by 11:07 a.m. in Budapest, the highest in more than a week. It headed for a 1.7 percent advance in the past five days, the best performance among more than 20 emerging-market peers monitored by Bloomberg. Yields on 10-year notes fell 22 basis points, or 0.22 percentage point, to 5.87 percent, the lowest level in more than a week.
Hungary’s industrial output expanded for the first time this year in April, data from the statistics office in Budapest showed today, matching its preliminary estimate. Hungary’s economic growth in 2013 may surpass the government’s 0.7 percent forecast, Prime Minister Viktor Orban said in an MR1 radio interview today. Data today may show U.S. industrial output rose 0.2 percent in May, according to a Bloomberg survey, a day after reports on retail sales and jobless claims beat estimates.
“Investor sentiment mostly improved on the better-than-expected U.S. macroeconomic data,” Zoltan Arokszallasi, a Budapest-based analyst at Erste Group Bank AG, wrote in a research report today.
The forint weakened to a six-week low on June 11 and Hungary’s 10-year bond yields rose to a two-month high as concern the U.S. Federal Reserve may scale back its monthly bond purchases reduced investors appetite for riskier assets.
“Sentiment will probably remain volatile because of the uncertainties over the continued quantitative easing policy from the Fed,” Arokszallasi wrote.
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