Forint trips on interbank market
The forint was trading at 311.19 to the euro late Thursday on the interbank forex market, down from 310.03 late Wednesday. At 310.14 to the euro early Thursday, the forint moved between 309.87 and 311.36.
The Hungarian currency quickly said good-bye to an almost two-month high reached on Wednesday in euro terms after two experiments on Tuesday and Wednesday with levels under 310 to the euro proved to be short-lived. The forint firmed temporarily after Hungary' economy minister had floated the prospect of a forex sovereign issue still this year on Tuesday.
One factor on Thursday was the continuing tumble of the euro in dollar terms, as the currencies of Central and Eastern Europe are historically more sensitive to moves in the euro's exchange rate against the dollar than other emerging-market currencies. Betting on these currencies against the dollar is a leveraged version of trading the euro, Barclays said in a note on Thursday.
With eurozone inflation at 0.4%, growth barely visible and the ECB far from achieving its aims in boosting its balance sheet, the forint and other regional currencies should continue to be vulnerable.
The forint traded at 244.45 to the dollar, down from 242.59 late Wednesday. On Thursday, it moved between 242.53 and 244.91, a two-week low.
It was quoted at 257.88 to the Swiss franc, down from 256.62 late Wednesday. Its range on Thursday was 256.44 to 257.93.
The Wall Street Journal pointed out that euro has been on a steep decrease, by American dollar climbing to its highest level against the euro in almost two years.
“The euro has been whacked by the runaway dollar, likely to the joy of the ECB. Andrew Peaple and Katie Martin discuss how low the euro can go” the Wall Street Journal reported.
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