Forint further down on interbank market
The forint was trading at 308.08 to the euro late Thursday on the interbank forex market, down from 307.44 late Wednesday. At 307.35 to the euro early Thursday, the forint moved between 306.84 and 309.67, a ten-day low, further away from last Friday's three-and-a-half-month high at 304.59 intraday. The Hungarian currency continued down in the mincer of global risk aversion.
Government bonds were oversubscribed at the regular Thursday auction due to the limited offer, with yields easing compared to the previous auction, but rising from secondary market levels, which climbed further after the auction. But as secondary market yields rose much more than those of the corresponding US treasuries, the premium on Hungarian sovereigns also promises their attraction should not be considerably dented, analysts say.
CIB Bank said in a note that the forint's slide was not unusual at a time of heightened global risk aversion, and CIB reckons further modest falls are among its near-term prospects. But consolidation is also on the cards, while the Hungarian authorities would probably like the currency as strong as possible, and use all the tools to that end, to keep public debt on a downward path by year end, CIB said.
Expectations are still low, but hopes grow, for the US Federal Reserve to stay put next year longer than previously thought, and this, combined with no further rate cuts in Hungary, all but pledged in spite of deepening deflation by the deputy head of the central bank on Monday and one of its rate setters on Thursday, could also put some floor under the forint and help achieve the debt goal.
The forint traded at 240.81 to the dollar, down from 239.50 late Wednesday. On Thursday, it moved between 239.19 and 243.65, an eight-day low. It was quoted at 255.23 to the Swiss franc, down from 254.71 late Wednesday. Its range on Thursday was 254.22 to 256.77, a twelve-day low.
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