Forint eases on interbank market


The forint was trading at 303.69 to the euro late Thursday on the interbank forex market, slightly down from 303.17 late Wednesday. At 303.18 to the euro early Thursday, the forint moved between 301.23, a 14-month high, and 304.48.

After an initial shot up in the wake of the Fedʼs statement Wednesday evening that scaled back interest rate hikes on the horizon in the United States, the Hungarian forint corrected down while the US dollar corrected up against major currencies on convincing employment data.

Thursday╩╝s regular auction of longer-term Hungarian sovereigns went with yields falling steeply from secondary market benchmarks but broadly in line with the previous auction, and low demand, except for the 10-year tenor, also reflected volatility.

The forint is also pressured by expectations for a rate cut from the National Bank of Hungary (MNB) as early as next week. In view of the Fed╩╝s probable postponing stance, analysts now see a deeper cut next Tuesday in Hungary than previously thought.

Hungary╩╝s rate setters have learnt the lesson of their Polish counterparts and they won╩╝t declare an early end of the easing cycle. Instead, they╩╝ll leave their stance open and cut gradually. This should offer protection against the forint firming versus the euro, the Royal Bank of Scotland said in a note on Wednesday.

The forint traded at 285.51 to the dollar, down from 279.00 in final trades on Wednesday. On Thursday, it moved between 278.64 after a 13-day high at 275.47 Wednesday evening, and 286.07. It fell into a new 13-year trough at 292.39 last Friday intraday.

It was quoted at 287.64 to the Swiss franc, down from 285.13 late Wednesday. Its range on Thursday was 284.15 after a six-day high at 283.76 after-Fed on Wednesday, to 288.23, a four-day low. 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 Febuary 26.


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