Forint down on interbank market
The forint was trading at 314.78 to the euro late Wednesday on the interbank forex market, down from final quotes at 313.96 on Tuesday. At 313.94 to the euro early Wednesday, the forint moved between 313.52 and 314.93, after a nine-day high at 312.50 late Friday, following five-month lows on the wrong side of 318 earlier last week.
While the dollar snapped a three-day falling spell after mixed US data confirmed the rate hike schedule of the US Fed for next year, and the euro eased, the Hungarian currency lost out to both, less to the euro and more to the stronger dollar.
On the domestic turf, the minutes of last weekʼs policy meeting of the National Bank of Hungary (MNB) published on Wednesday reinforced expectations for more unconventional easing to come, although the central bank skipped any move on December 15 despite expectations that were whipped up by its own communication ahead of the meeting.
"Members (of the Monetary Council) agreed that the inflation target could be achieved in a sustainable way by holding the base rate unchanged for an extended period and by using unconventional, targeted monetary policy instruments," the minutes said.
Given the circumstances, fresh MNB data on an improving current account did not help the forint. Hungaryʼs current account surplus returned to growth in the third quarter after a fall in the second quarter, and was 46% higher than a year earlier. The year-to-date surplus was 80% higher than that of the whole of last year, MNB figures out on Wednesday showed.
But this was also tempered by other official statistics on Wednesday which confirmed that imports rose for a second month in October in monthly comparison, while exports and the trade surplus dropped.
The forint traded at 289.14 to the dollar, down from final quotes at 286.73 on Tuesday. On Wednesday, it moved between 286.53 and 289.40, after a nineteen-day high at 285.26 late Tuesday, and a two-week low at 293.45 last week Thursday. On November 27, it fell to a third more than fifteen-year low within a month at 295.76.
It was quoted at 291.30 to the Swiss franc, down from 290.23 late Tuesday. Its range on Wednesday was 289.66 to 291.31, after a two-week high at 288.75 Tuesday intraday, and a nearly five-month low at 295.37 last week Wednesday. 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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