Today's Major Market Move: Hungarian Forint Weakens 5.5% vs the USD in Past Two Weeks

As Europe continues to struggle through the current crisis, the countries on the fringe of the Eurozone are feeling the reverberations. Both the Hungarian Forint and the Czech Koruna have weakened noticeably over the past two weeks, with the USDHUF climbing 5.5% and the USDCZK up 6.6%. Here's the list of the worst performing currencies since 10/29:

Click here to go to the live table.

The Forint has now broken out to a new 2011 high (although it did retrace some on Thursday and Friday):

Click here to go to the live chart.

Things aren't going to get any easier for Hungary this coming week. Over the weekend Fitch cut the ratings on some Hungarian sovereign debt and S&P placed the country on credit watch negative. Businessweek has some commentary from S&P:

Hungary’s “unpredictable” policies, including the dismantling of checks on policies, levying of extraordinary industry taxes and forcing lenders to swallow exchange-rate losses on loans, are harming investment and growth at a time when the economic environment is deteriorating, S&P said.

“A more unpredictable policy environment, stemming from a weakening of oversight institutions and some budgetary revenue decisions, will have a negative effect on economic growth and government finances,” S&P said. “Downside risks to Hungary’s creditworthiness are increasing as the external financial and economic environment is weakening.”

I would also expect to see a sizable move in Hungarian CDS in the next few days, although so far this month the CDS have remained relatively unscathed. Here's the top price gainers in government CDS since Nov 1:

Click here to go to the live table.