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Forint eases further versus the euro on interbank market

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The forint was trading at 307.33 to the euro late Thursday on the interbank forex market, down from 307.04 late Wednesday. At 307.05 to the euro early Thursday, the forint moved between 306.11 and 307.76 after a one-week high at 303.96 Tuesday intraday, and after another more than two-month low within a week at 309.68 Monday intraday.

After the shot-up on Tuesday on the ECBʼs plan to temporarily boost its QE in May and June, the Hungarian currency continued sliding back into its previous range versus the euro as the common currency turned around and gained 0.2% versus the dollar by late afternoon.

Hungarian sovereign yields fell again which, in other circumstances, could support the forint, but not now, when euro zone yields resumed rising, further narrowing Hungaryʼs risk premium, after preliminary PMI surveys painted a mixed picture of the euro zoneʼs private sector, the main trading and investment partner of the Hungarian economy.

The Fedʼs minutes, published late Wednesday, added to volatility as its dovish tone could not, of course, reflect the impact of more recent strong US housing data on Tuesday that augured for a nearer-than-expected rate hike in the US, with another batch of US housing data on Thursday distancing again the eventuality.

A surprise rate cut in Poland could prompt the National Bank of Hungary (MNB) to accelerate its on-going easing cycle, analysts add.

The forint traded at 276.37 to the dollar, slightly up from 276.56 late Wednesday. On Thursday, it moved between 274.24 and 276.95 after a more than three-week low at 277.57 Wednesday intraday, and a nearly three-month high at 267.21 last Friday intraday.

It was quoted at 295.36 to the Swiss franc, a hair up from 295.42 late Wednesday. Its range on Thursday was 294.02 to 296.02, a one-week low. 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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