Forint stable in euro, up in dollar
The forint was trading at 311.69 to the euro late Wednesday on the interbank forex market, exactly level with final quotes on Tuesday. At 311.61 to the euro early Wednesday, the forint moved between 311.15 and 313.21, after a one-month low at 313.22 Tuesday intraday.
Its two-month highs between 306-307 versus the euro late July now remote memories, the Hungarian currency, however, weathered market turmoil fairly well in the wake of a 4% devaluation of the Chinese yuan in two days, with the help of the US dollar which fell against the euro about as much as against the forint as certainty in the Fedʼs readiness to hike rates in September was dented.
Hungary, Romania and Poland were among the five biggest gainers in developing-nation bond markets, with Hungarian yields falling even at a faster pace than those on first rated government paper, while most emerging sovereign yields rose. The divergence shows how investors are seeking shelter after the surprise devaluation of the yuan this week roiled markets with the biggest exports to China and most dependent on plunging commodities. Countries of emerging Europe are net importers of oil, rely more on Germany than China for trade and are protected by the European Central Bank’s quantitative easing programme from the effects of expected US interest-rate increases, analysts say.
Meanwhile, some traders believe that the Fed could postpone tightening as soon as September in response to China’s currency devaluation move, as Fed officials are likely to remain concerned over global growth, currency war and waning inflation pressures.
The forint traded at 278.35 to the dollar, up from 282.31 in final quotes on Tuesday. On Wednesday, it moved between 278.08, a nearly tow-week high, and 282.63, after a more than three-week low at 286.47 last Friday intraday.
It was quoted at 287.39 to the Swiss franc, down from 285.69 late Tuesday. Its range on Wednesday was 284.67, a four-month high, to 287.61. 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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