Hungary's forint declines on street protests

Rioters cause damage to economy. Forint fell against euro again after some rioters turned against police forces during ceremonies and commemorations of Hungary’s uprising 50th anniversary. Streets were closed off in Budapest as authorities sought to bring to an end weeks of demonstrations that last month turned violent. The forint also led East European currencies lower after a technical chart some traders use to predict currency movements suggested its gain to a four-month high last week was excessive. „The local political situation is still very uncertain,” said Lars Christensen, a senior strategist at Danske Bank S/A in Copenhagen. „The gains in the forint were clearly excessive.” Against the euro, the forint declined 0.20% to 263.20 per euro as of 4:00 p.m. in Budapest. It strengthened as far as 261.47 on October 20, the highest since June 2. The currency may fall to 270 per euro this week, Christensen said. The forint's 14-day relative strength index against the euro was 70.3 today after rising to 73.2 on October 20. A level above 70 or below 30 signals a reversal in the direction of the currency. Today the dollar rose against all 16 of the most-traded currencies Bloomberg tracks on speculation the Federal Reserve will resume interest-rate increases, helping to buoy the yields investors can get from US assets. „Sentiment towards emerging markets has deteriorated,” Christensen said. (Bloomberg)