While the head of the National Bank of Hungary (NBH) told parliament on Tuesday that Hungary must prepare for tough times, including “external attacks” against the country’s financial system next year, investors still pencil in a stronger forint for the end of this year, citing the government’s need to achieve a public debt ratio acceptable in Brussels.
In an environment not favouring emerging assets, the Hungarian currency was still underpinned by a stronger euro in dollar terms, and by a steep fall of first rated sovereign yields on the secondary market as a result of the day’s escape from shares in leading markets. Hungarian sovereign yields also fell, but less, so their risk premium increased.
The forint traded at 246.59 to the dollar, up from 248.51 late Monday. On Tuesday, it moved between 245.72, a one-week high, and 249.04, after falling to a more than one-month low at 250.62 on Monday. It was quoted at 254.99 to the Swiss franc, down from 254.63 late Monday. Its range on Tuesday was 253.91, a six-day high, to 254.99.
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