The Hungarian currency continued to recuperate versus the euro on the back of the common currencyʼs equal-pace fall against the dollar amid widening guesswork in the market on the range of easing steps the European Central Bank could make in December. The forint still fell against the dollar on growing certainty in a U.S. rate hike also in December.

Commenting on Hungaryʼs inflation which came in at a more-than-expected 0.1% annually on Tuesday, Citigroup said the Hungarian forint may come under pressure in the longer term if money market rates fall below the central bankʼs benchmark interest rate. That is a possibility if Hungaryʼs central bank takes yet more unconventional steps to boost liquidity, if interest rates in the U.S. start to rise and if inflation in Hungary accelerates, the bank said in a note on Tuesday. Citi expects the central bankʼs key rate to remain on hold at the current 1.35% record low until at least early 2018 “if the European rate environment remains benign,” but this would be a serious forint-negative, other analysts add.

The regular auction of three-month Hungarian Treasury bills on Tuesday again illustrated the limits of the central bankʼs “self-financing” program, a scheme to prompt domestic banks into government debt, compared to market reality. The limited offer was fully sold, while demand fell and the average yield rose again from record lows reached in September, reflecting investorsʼ discontent with junk-rated Hungariansʼ yields and risk premia deemed too low.

The Hungarian three-month yield started this year at 1.76% on the secondary market, sank to a record low at 0.42% by September 17, and was at 0.92% Tuesday afternoon, 10 bps above the dayʼs auction yield which rose 4 bps from the previous auction a week ago.

Meanwhile, the benchmark ten-year Hungarian sovereign yielded 3.74% at the start of this year, fell to 3.28 by October 8, and was at 3.52 on Tuesday, also on the secondary market.

The deputy head of MNB said last week the central bank still wanted to see yields on government paper to sink.

The forint traded at 292.05 to the dollar, down from final quotes at 291.82 on Monday. On Tuesday, it moved between 291.11 and 292.97, after a more than fifteen-year low at 294.40 Friday intraday.

It was quoted at 290.04 to the Swiss franc, up from 290.76 late Monday. Its range on Tuesday was 289.74, a four-day high, to 291.24, after a more than tow-month low at 292.71 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.