Forint stalls on interbank market
The forint was trading at 305.98 to the euro late Friday on the interbank forex market, down from 305.75 late Thursday. At 305.71 to the euro early Friday, the forint moved between 305.23 and 306.36. It touched an almost one-month high at 305.10 to the euro on Thursday.
The forint is 0.99% stronger in euro terms than a week ago, after it eased 0.46% over the last week.
It is down 2.85% year-to-date after falling 1.95% last year against the euro.
The Hungarian currency stalled on its recent rising path as the risk premium of the benchmark 10-year Hungarian sovereign fell. Its yield was unchanged over the day on the secondary market while that of the corresponding US treasury rose, because better than expected data of October US retail trade growth counterbalanced figures showing the US faced more desinflation through imports last month. This awakened worries for the Fed's rate policy next year after more relaxed views seen lately.
Meanwhile, better than expected third quarter euro zone GDP figures eased pressure on the ECB to come up with more liquidity-enhancing programmes beyond what it had announced since last summer.
The dollar bid is likely to continue in an environment of weaker
equities and slower growth, and investors are likely to prefer holding USD against low-yielding currencies like the forint, Citigroup said in a note on Friday. But it also added that it "liked Hungary's long-maturity local-currency government bonds."
The forint was underpinned by fresh data on a big rise of Hungary' current account surplus in September, and on continuing expectations that the government would do everything in its power to prop up the currency in order to comply with an EU conform public debt reduction target by year-end.
The forint traded at 245.42 to the dollar, down from 245.06 late Thursday. On Friday, it moved between 244.80 and 246.75. Last Friday it hit a third nearly three-year low in as many days at 250.78, but on Thursday it reached a two-week high at 244.50.
It was quoted at 254.72 to the Swiss franc, down from 254.29 late Thursday. Its range on Friday was 253.98 and 245.90. It reached a more than three-week high at 253.97 on Thursday.
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