Forint eases after short rally
The forint was trading at 311.81 to the euro late Wednesday on the interbank forex market, down from final quotes at 310.98 on Tuesday. At 311.54 to the euro early Wednesday, the forint moved between 311.06 and 312.38, after a four-day low at 314.49 Tuesday intraday, and an almost two-week high at 309.78 also on Tuesday in late trades.
The Hungarian currency corrected down only half of the results of a late rally on Tuesday, when data on widening US trade deficit confirmed expectations the Fed should remain patient, prompting foreign investors into higher-yielding assets.
Just like on the share market, it is not fundamentals that feed the trend, analysts add.
In Hungary, international reserves fell in September €1.409 bln to €32.127 bln, and were down €2.451 bln from the end of last year. Foreign currency reserves fell 5.3% to €31.57 bln to end-September from end-August, National Bank of Hungary (MNB) figures out on Wednesday showed. The fall should be the consequence of the monetary authoritiesʼ self-financing efforts and the conversion of household forex mortgages into forint, analysts add.
Data on Tuesday showed Hungaryʼs cashflow-based general government deficit, excluding local councils, reached almost 107% of the annual target after about 103% at the end of August.
The forint traded at 277.05 to the dollar, down from 275.90 in final quotes on Tuesday. On Wednesday, it moved between 276.20 and 278.22, after a four-day low at 280.36 Tuesday intraday, and a more than two-week high at 274.84 also on Tuesday in late trades.
It was quoted at 285.46 to the Swiss franc, slightly up from 285.61 late Tuesday. Its range on Wednesday was 285.23 to 287.11, after a seven-day low at 288.72 Tuesday intraday, and a twelve-day high at 284.24 also on Tuesday in late trades. 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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