Are you sure?

For some it is good for some of is not – speculations (?)

Trade and volatility are heavy on the market. The HUF is currently trading in a range between 278 and 279 versus the euro. Trades finished over 278,55/60 on Wednesday and started 276,70/80 today.

The Slovakian central bank has recently announced that in intervened on the market to stop the SKK's weakening (bought SKK vs. the EUR), which put a transitional stop to the forint's losses. Around midday, SKK/EUR went north of the middle of the intervention band (38.455), which has not taken place since Slovakia joined the ERM2 last November.

The central bank said the current weakening of the currency was justified by macroeconomic fundamentals, indicating it was ready for further intervention to fend off “unjustified" fluctuations. Szilárd Kovács, currency dealer at Commerzbank said that he grew very pessimistic watching the EUR/HUF movements. He noted that a number of market players were seeing the HUF possibly easing to 282 (the middle of the flotation band is at 282.36). PM Gyurcsány also mentioned this level when on 10 June he unveiled the austerity package aimed to remedy the bloated budget deficit. Gyurcsány hinted that central parity (EUR/HUF 282) was mid-term preference. At present weakening and strengthening of Forint are both possible, analysts say, and BUX is expected to rise due to changes of the global market.

Share prices of MOL (+115Ft/0,6%), OTP (+140Ft/2,6%), Magyar Telekom (+26Ft/3,4%) and Richter (650Ft/1,8%) are all higher. (HVG,, MTI)