Forint falls further on interbank market
The forint was trading at 301.41 to the euro late Thursday on the interbank forex market, down from 300.27 late Wednesday. At 299.83 to the euro early Thursday, the forint moved between 298.83 and 302.34, an almost two-week low, after a new 15-month high at 295.28 Tuesday intraday.
The Hungarian currency was left behind by the euro which suddenly strengthened on dismal US industrial, unemployment and housing data which added to speculation that the Fed could delay hiking interest rates until late this year, instead of tightening midyear.
A decision by the EU to withhold some payments to Hungary from development funds on objections concerning the project selection system in the country also weighed as less forex inflows could diminish forint demand.
Some investors may also be channelling funds into the Polish zloty from the Hungarian currency as Hungaryʼs central bank is expected to cut rates further while the Polish central bank has apparently stopped its easing, traders said.
The forint fell about 1.5% to the euro on Wednesday and Thursday, weighed down also by official calculations that show the extra burden placed by this weekʼs legislation on Hungaryʼs financial sector in terms of propping up mandatory compensation funds in the wake of the collapse of three local brokerages could, within a couple of years, equal the bank tax cut planned for next year, although some of the extra payments may be deductible from the corporate tax.
The forint traded at 280.84 to the dollar, a hair up from 280.98 late Wednesday. On Thursday, it moved between 278.87 and 282.70, after a nearly four-week low at 283.51 Wednesday intraday, and a five-day high at 276.56 Tuesday intraday.
It was quoted at 292.85 to the Swiss franc, down from 291.30 late Wednesday. Its range on Thursday was 289.89 to 293.59, a more than two-month low, after a four-day high at 284.84 Tuesday 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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