USDTRY and EURHUF likely to increase on low/negative real interest rate in 2016

November Industrial output data of Turkey and Hungary posted deceleration in growth of both the economies, as Turkish production decreased by 1% M/M, declining to 3.5% YoY against consensus of 4.3%, while Hungarian production dropped 1.4% M/M, sliding from 12.7% YoY (wda) to 7%.

Both the economies have prospered on manufacturing recoveries over the past couple of years, with Hungary catching up strongly. New government's pro-growth policies are expected to help Turkish economy, while Hungary is likely to moderate through this year as EU-backed infrastructure projects are on hold.

"As far as USDTRY and EURHUF are concerned, we expect steady increase through 2016 because of the low/negative real interest rate in these countries" - CommerzBank