It is 0.79% weaker compared to last Friday, after gaining 0.29% the previous week. It is down 0.92% from the end of last year, after it lost 6.12% last year, and 1.95% in 2013.
Along with the Polish zloty, the Hungarian currency continued to stabilise after Thursday’s panic brought about by the Swiss central bank scrap of the more than three-year-old cap of the franc against the euro.
The Swiss move heightened expectations that the ECB could start its long-awaited quantitative easing as soon as next Thursday. As a result, safe euro area sovereign yields dove more steeply on the secondary market than those of Hungarians, increasing their risk premium which benefited the forint despite the renewed fall of the euro against the dollar.
The forint, however, still fell in franc terms. Some analysts also reckon that the forint’s volatility could preclude a policy rate cut by Hungary’s central bank in the foreseeable future despite weaker economic indicators and deepening deflation. Forecasts for a rate cut had multiplied by as late as early this week.
Commerzbank expects Thursday’s Swiss move to have no appreciable medium-term impact on the euro to forint exchange rate or Hungarian interest rates. The country’s debt-to-GDP ratio has decreased over previous years, the banks are well-prepared for the forex household mortgage conversion into forint debts to take place February 1, and now only limited non-mortgage Swiss franc exposure remains in Hungary, Commerzbank said in a note on Friday.
The forint traded at 277.68 to the dollar, slightly up from 277.88 late Thursday. On Friday, it moved between 275.54 and 278.92 after falling to an all-time low of 280.33 on Thursday.
It was quoted at 323.68 to the Swiss franc, down from 312.19 late Thursday. Its range on Friday was 314.08 to 326.62 after it plunged to an all-time low at 378.49 on Thursday.
Producing journalism that is worthy of the name is a costly business. For over 30 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
