Forint still drifts on interbank market


The forint was trading at 306.61 to the euro late Tuesday on the interbank forex market, down from 304.81 late Monday. At 304.87 to the euro early Tuesday, the forint moved between 304.25 and 306.87, an eleven-day low. At 301.96 last Friday intraday, it hit a second nine-month high within two days. 

Central European currencies continued to drift one day before a meeting of the Polish central bank that is expected to launch a new round of monetary easing in the region, although expectations for large rate cuts have been trimmed recently.

The forint's slide, however, is still shallow as it is propped up by the recent government practice to issue only as much new debt as planned despite usually large oversubscription and slightly falling yields.

Waiting for the ECB's upcoming QE and investors' expectations that two of the three major credit rating firms may improve their outlook on Hungary's junk rating within a month also support the Hungarian currency, while the US dollar's continuing strength versus the euro in the wake of new speculation that the Fed would start tightening in June instead of September is capping the upside.

The forint traded at 273.88 to the dollar, down from 272.52 late Monday. On Tuesday, it moved between 271.54 and 274.21, another almost three-week low within two days.

It was quoted at 285.62 to the Swiss franc, down from 284.30 late Monday. Its range on Tuesday was 283.21 to 285.73, a four-day low. It reached the highest at 281.07 last Thursday 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.

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