Forint stable versus main currencies

The forint was trading at to 312.22 the euro late Monday on the interbank forex market, down within narrow range from final quotes at 311.86 on Friday and 311.96 on Sunday.

At 311.98 to the euro early Monday, the forint moved between 311.02, a twelve-day high, and 312.29.

Over last week, the forint gained 1.01% versus the euro after falling 1.34% in the week before.

Following initial gains versus the euro and the dollar, the Hungarian currency stabilised in narrow ranges against both, as the euro also stopped on its upward path against the dollar after renewed hopes for the US Fedʼs patience pushed the dollar down on Friday and early Monday.

First-rated sovereign prices dove across the board in the secondary market as investors bailed out into shares and other higher-yielding assets, including Hungarian government bonds, temporarily counterbalancing the effect of Hungarian monetary policy tools which aim at limiting the ratio of state debt in non-resident hands.

First surveys also show that measures of Hungaryʼs central bank to prompt resident banks into government paper resulted in fewer uptakes than previously thought because foreign-owned resident banks used funds squeezed out of central bank instruments also to repay their parents on earlier loans related to past forex mortgages.

Meanwhile, the forint is also capped by a 10-20% chance of an additional rate cut by Hungaryʼs central bank in the first half of next year as forward rate agreement (FRAs) contracts suggested on Monday in a Reuters survey.

The forint traded at 278.30 to the dollar, a hair down from 278.21 in final quotes on Friday and 278.16 on Sunday. On Monday, it moved between 276.21 and 278.59, after an eleven-day high at 275.87 late Friday.

It was quoted at 285.70 to the Swiss franc, slightly down from 285.48 late Friday, but up from 286.39 late Sunday. Its range on Monday was 284.47, an eleven-day high, to 286.45. Since its crash to an all-time low at 378.49 to the franc on January 15 when the Swiss central bank scrapped its cap of 1.20 to the euro, it reached the highest at 281.07 on February 26.