Forint down on interbank market
The forint was trading at 310.14 to the euro late Wednesday on the interbank forex market, down from final quotes at 309.15 on Tuesday.
At 309.20 to the euro early Wednesday, the forint moved between 309.02 and 310.20, after a thirteen-day high at 308.34 late Monday and a four-day low at 311.28 Monday morning.
While the euro corrected 0.3% up against the dollar after easing 1.2% in the last five days, the Hungarian currency fell versus it, and for most of the day also against the dollar in waiting for the U.S. Fedʼs latest minutes in the evening that could support expectations for a rate hike in the U.S. in September.
Pressure on emerging Europe currencies was increased by Polish figures, which showed a bigger-than-expected slowdown in the growth of retail sales and industrial output in July. This dented market consensus that emerging Europe could by kind a safe haven for funds flowing out of Chinese and Asian assets.
An auction of longer-term Hungarian government bonds on Wednesday saw falling yields on strong demand. But the latter stems mainly from domestic banks on enticing measures by the National Bank of Hungary (MNB), so it has little impact on the forintʼs exchange rate. Meanwhile non-residents, increasingly discontent with Hungarian risk premiums in view of the approaching overseas tightening, sold same-term Hungarian sovereigns on the secondary market, reflected in their yields rising.
The forint traded at 280.45 to the dollar, a hair up from 280.51 in final quotes on Tuesday. On Wednesday, it moved between 279.21 and 281.20, a one-week low, after a nearly tow-week high at 277.15 late last Thursday and again late Friday.
It was quoted at 288.86 to the Swiss franc, down from 286.89 late Tuesday. Its range on Wednesday was 286.21 to 289.06, a one-week low, after a four-month high at 284.24 late last Thursday. Since its crash to an all-time low at 378.49 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.
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