Forint continues to recover
The forint was trading at 319.85 to the euro late Monday on the interbank forex market, down from 318.94 late Friday and 319.39 late Sunday. At 318.94 to the euro early Monday, the forint moved between 317.98, a five-day high, and 320.42, after hitting an all-time low at 327.62 last Thursday.
The Hungarian currency continued to slowly recover as dust settled after the Swiss central bank's surprise scrap of its more than three-year old exchange rate cap against the euro last Thursday.
However, it was left behind by a euro gaining some strength against the dollar as chances for a Fed rate hike in the autumn are scaled down by analysts and investors alike in the wake of US inflation data last Friday.
The forint was still underpinned by receding expectations for a rate cut by Hungary's central bank. The Russian rouble's rise against major currencies earlier in the day helped as well as did falling euro area sovereign yields, which widened Hungarian sovereigns' risk premium while yields of the latter fell less, in anticipation of some quantitative easing programme from the ECB later in the week.
Raiffeisen bank said in a note on Monday that in case of another wave of weakening — which it considers unlikely — 322.60 to the euro could be a strong resistance level.
The forint traded at 275.01 to the dollar, up from 275.67 late Friday and 276.24 late Sunday. On Monday, it moved between 273.68, a four-day high, and 277.18, after falling to an all-time low of 280.33 last Thursday.
It was quoted at 313.85 to the Swiss franc, up from 320.27 late Friday and 321.81 late Sunday. Its range on Monday was 313.37, a four-day high, to 323.20, a four-day low, after it plunged to an all-time low at 378.49 last Thursday.
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