Forint rides hopes for a Greek deal

Analysis

The forint was trading at 311.06 to the euro late Monday on the interbank forex market, up from 313.22 late Friday and 313.08 late Sunday. Also at 313.08 to the euro early Monday, the forint moved between 310.42, a four-day high, and 313.39, after a nine-day low at 314.03 Friday intraday.

It fell 0.28% versus the euro over last week, after losing 0.13% the previous week.

While the euro remained stable against the dollar, Central European currencies gained traction on Monday on optimism over a last-minute political deal on Greece at a late-night EU summit.

The Hungarian currencyʼs upside, however, was limited by unanimous expectations of analysts that the National Bank of Hungary (MNB) would continue easing on Tuesday, while analystsʼ views differ whether the central bank would pause after that in anticipation a September US rate hike, or would carry on cutting while the beneficial impact of a possible Greek deal in financial markets opens some leeway.

ING Bank sees Hungary to deliver its last 15bp rate cut on Tuesday and stay pat thereafter due to upside inflation risks. A solid external position point to forint appreciation but the external environment, including Greece, Bunds and the US Fed, will be the key, ING said on a note on Monday.

Royal Bank of Scotland said in a note also on Monday that "we assign an about 80% probability of a cut (on Tuesday by the MNB) and we see a 60% probability that the easing cycle extends beyond June."

The forint traded at 272.83 to the dollar, up from 275.89 late Friday and 275.56 late Sunday. On Monday, it moved between 272.53, a four-day high, and 275.70, after a one-month high at 271.84 last Thursday intraday.

It was quoted at 297.27 to the Swiss franc, up from 299.92 late Friday and 300.06 late Sunday. Its range on Monday was 296.45, a four-day high, to 300.56, an almost two-week low early in the morning. Since its crash to an all-time low at 378.49 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.


ADVERTISEMENT

531 new coronavirus cases registered in Hungary Figures

531 new coronavirus cases registered in Hungary

Opposition parties to begin PM candidate primaries Elections

Opposition parties to begin PM candidate primaries

New managing director at the helm of Wolt Hungary Appointments

New managing director at the helm of Wolt Hungary

Budapest bike-sharing scheme boasts record ridership City

Budapest bike-sharing scheme boasts record ridership

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 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.