Forint firm on interbank market


The forint was trading at 310.34 to the euro late Tuesday on the interbank forex market, up from 310.96 late Monday. At 310.31 to the euro early Tuesday, the forint moved between 309.69 and 311.71, after an almost three-week high at 309.27 Monday intraday, and a sixth more than five-month low within a week at 318.55 last Wednesday evening.

Ahead of a crucial vote on Wednesday in Greeceʼs parliament on the countryʼs bailout programme, an abrupt turnaround in money flows, outbound from euro zone periphery and emerging Europe government paper, and back again into German Bunds, could have paved a sloping path for Central European currencies on Tuesday, but other factors mitigated the effect.

   Dollar pressure eased, and the euro recuperated some of Mondayʼs losses as investors expected a fairly dovish assessment from Fed Chair Janet Yellen on Wednesday. Such expectations were supported on Tuesday by data on a surprise fall in US retail trade in June.

   Apart from the recovering euro, the falling Russian ruble also underpinned the forint, after an international agreement to curb Iranʼs nuclear programme which could lead to lifting sanctions on Iranʼs oil exports dented oil related currencies against those of importers.

   Another well-received auction of three-month Hungarian Treasury bills with falling yields also helped the forint, while secondary market yields on longer-term Hungarian sovereigns increased. But as the longer end of the Hungarian curve is becoming increasingly the turf of domestic banks, yield trends there have diminishing direct effect on the forintʼs course. Meanwhile, the short end is still popular with foreign investors since the central bank practically locked them out of its short-term parking facility by replacing its two-week bills with two-week deposits last year.

   The forint traded at 281.82 to the dollar, up from 282.56 late Monday. On Tuesday, it moved between 280.58 and 283.93, a four-day low, after a more than two-week high at 276.70 last Friday intraday.

   It was quoted at 298.12 to the Swiss franc, down from 297.56 late Monday. Its range on Tuesday was 296.53 to 299.43, a four-day low, after a nearly five-week high at 295.24 Monday intraday. 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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