Forint up on interbank market
The forint was trading at 304.42 the euro late Thursday on the interbank forex market, up from 305.02 late Wednesday. At 305.24 the euro early Thursday, the forint moved between 304.36 and 305.35. It touched a close to six-month high at 304.07 on Wednesday.
After several, failed, attempts in the last few days, the Hungarian currency was on its way to close above the key 305 to the euro level. Analysts reckon that the breach of this resistance point could lead to levels of 302-303 soon.
Another fall of short-term yields at Thursday's auction also helped, though oversubscription was low, but the government sold only the offered amount.
Investors still price in the general expectation that Hungary's government is interested in a strong forint by end-2014 to decrease the debt-to-GDP ratio.
But they also expect the artificial strength of the forint to diminish in the first quarter of next year once households are not affected by forex risk any more.
And some analysts, including Morgan Stanley's, see room for monetary policy easing in Hungary. In the short run though, rate expectations also underpin the forint as they fuel a return of demand for short-term Hungarian sovereigns.
The forint traded at 242.66 to the dollar, up from 242.97 late Wednesday. On Thursday, it moved between 242.23 and 243.79. It reached an almost one-month high at 242.00 on Wednesday. It was quoted at 253.43 to the Swiss franc, up from 253.88 late Wednesday. Its range on Thursday was 253.30 to 254.18. It hit a close to one-month high at 253.16 on Wednesday.
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