Forint firm versus euro, loses out to dollar
The forint was trading at 313.15 to the euro late Wednesday on the interbank forex market, up from final quotes at 313.76 on Tuesday. At 313.77 to the euro early Wednesday, the forint moved between 313.02, a five-day high, and 314.17, after a two-week low at 316.26 late last Friday, and a more than five-week high at 309.05 both last week Monday and Tuesday.
A better-than-expected September US private hiring survey supported the dollar and fresh data on continuing disinflation in the euro area pressured the common currency, leaving the forint down versus the dollar, but firm against the euro.
Meanwhile, analysts added a new argument to projections that Hungaryʼs central bank would be compelled to ease more at some point later.
The Hungarian central bank was the most likely to react to the Volkswagen scandal’s potential drag on economic growth in the CEE region by easing monetary conditions, Bank of America said in a note on Wednesday.
In a worst-case scenario, the Volkswagen fallout may shave between 1% point to 1.5% points off the Czech and Hungarian economic growth and current accounts, BofA said.
Hungaryʼs annual economic growth has already slowed to 2.7% in the second quarter from 3.5% in the first quarter.
The forint traded at 280.55 to the dollar, down from 278.92 in final quotes on Tuesday. On Wednesday, it moved between 278.54 and 280.98, after a five-day high at 278.15 late Tuesday, and a more than six-week low at 284.00 late last Friday.
It was quoted at 287.51 to the Swiss franc, down from 287.02 late Tuesday. Its range on Wednesday was 286.36 to 288.07, after a nearly three-week low at 289.23 last Friday intraday. Since its crash to an all-time low at 378.49 to the franc 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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