Forint down on regional rate expectations

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The forint was trading at 318.19 to the euro late Tuesday on the interbank forex market, down from 317.60 late Monday. At 317.48 to the euro early Tuesday, the forint moved between 317.22 and 319.14.

After some recovery late Monday, the Hungarian currency eased again on Tuesday as sharply slowing inflation in Romania took over from Monday's bad Czech retail data to keep alive rate cut bets in the region.

Hungary's December consumer price data, due on Wednesday, ought to show some deepening of annual deflation from November, analysts forecast.

The euro's further fall against the dollar in the wake of expectations that the ECB could come up with at least a watered-down version of quantitative easing soon while the Fed may postpone its expected rate hike to next year, and the Russian ruble's seemingly unstoppable dive against major currencies also kept the forint under lid.

A well-received offer of three-month Hungarian Treasury bills with unchanged average yield from a week ago apparently did not do much for the forint, while the yield of the Hungarian benchmark 10-year sovereign yield fell, reflecting rate expectations, and that of the Bund rose, narrowing Hungary's risk premium.

The forint traded at 270.08 to the dollar, down from 268.32 late Monday. On Tuesday, it moved between 267.76 and 271.38, a new more than twelve-year low.

It was quoted at 265.00 to the Swiss franc, down from 264.45 late Monday. Its range on Tuesday was 264.14 to 265.67.

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