26 Oct 2020 00:49
EUR/HUF is quite popular currency pair on the Forex market. Hungary is an active EU’s trade partner. The European Union accounts for the largest share of Hungarian exports and imports. The trading instrument EUR/HUF is very popular among experienced traders who choose it because of the high stability and predictability of the economies of the euro area and Hungary. The financial asset is most actively traded at the European session, during the rest sessions it is almost not traded.
EUR/HUF is the cross currency pair as it does not include the U.S. dollar. However, the U.S. currency has a significant influence on it. This can be seen if you combine two price charts: EUR/USD, USD/HUF. Thus, you can get an approximate EUR/HUF chart.
The U.S. dollar has a significant influence on both currencies. So, a EUR/HUF trader should take into account the major U.S. economic indicators in order to make a correct prediction of a future trend of this financial asset. The indicators which are important to keep track of: the Federal Reserve discount rate, GDP, unemployment rate, new jobs, etc. It is also worth noting that the currencies comprising the pair can respond at a different rate on changes in the U.S. economy. Therefore, the EUR/HUF may be considered as a specific indicator reflecting changes of these currencies.
The exchange rate of this trading instrument was attached to the euro since its introduction in most countries of the European Union until 2008, when Hungary refused to anchor its national currency’s exchange rate to the euro due to having no longer benefit.
Hungary is a country with a big share of foreign capital. That is why the Hungarian economy is highly dependent on the organizations and countries operating in its territory.
Hungary is an advanced industrial Central European country. The main economic sectors in Hungary are engineering, metallurgy and chemical industry. Also Hungary has a very developed agriculture, a significant proportion of which are gardening and wine-making industries. Much of the products are exported abroad. A significant proportion of Hungarian income is international tourism. Millions of foreigners visit this country annually, because they attracted by the nature of the country and its ancient traditions and architecture. Hungary's main trading partners are EU countries and Russia. For this reason, when you assess the further course of the Hungarian forint, you should pay special attention to economic indicators of these regions.
If you trade cross rates, it is necessary to remember that brokers usually set a higher spread for crosses than for more popular currency pairs, so you should carefully read the conditions the broker offers for trading this type of currency pairs.