After short peeks under 305 to the euro a couple of weeks ago, the Hungarian currency seems to be back to its range of 305-310, usual since early October, after it spent more than two months between 310-315 since late July.
The forint kept in a narrow range, as the euro’s Tuesday fall in dollar terms pressured it, while it was also underpinned by what the euro’s course suggested: hopes growing again in the afternoon for ECB’s quantitative easing as crude oil prices resumed falling and euro zone October producer prices came in with a one-year record drop.
Waning expectations for further base rate cuts from the National Bank of Hungary also supported.
Meanwhile, bond prices still reflected the short-lived rise of crude prices late Monday and early Tuesday, which temporarily cooled expectations for ECB’s benevolence. Benchmark Bund yields increased on the secondary market, but corresponding Hungarian 10-year sovereign yields rose less, which narrowed their risk premium, a negative for the forint.
The forint traded at 247.95 to the dollar, down from 245.55 late Monday. On Tuesday, it moved between 245.39 and 248.03, a three-week low. It was quoted at 255.29 to the Swiss franc, down from 254.53 late Monday. Its range on Tuesday was 254.32 to 255.39, a four-day low. It hit a six-day high on Monday at 254.18.
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