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Markets anxiously await EU summit

While market sentiment grew more optimistic one day ahead of today's extraordinary EU summit on the Greek debt crisis, investors are becoming increasing nervous as the time of the meeting approaches.

The Swiss franc fell 0.3% against the euro Thursday morning, helped by news of a France-Germany accord on Greece's debt crisis ahead of a European summit.

Germany and France have reached a common position on a second bailout of Greece in their effort to prevent the country's debt crisis from spreading through Europe, officials said on Thursday, but further details have not been disclosed so far.

The forint strengthened on Thursday morning's interbank market, trading at 268.19 against the euro at 10:15 a.m., compared to a Wednesday-evening rate of 268.73. The forint also strengthened against the US dollar and the Swiss franc on Thursday morning, trading at 188.18 to the USD and 229.29 to the CHF at 10:15 a.m., compared to Wednesday-evening rates of 189.22 and 230.71, respectively.

Dealers attribute the forint's strengthening to optimism among traders that a resolution to Greece's debt crisis will emerge from the euro-zone summit today. Dealers warn, however, that a sharp negative correction could smite the Hungarian currency if the summit fails to produce the anticipated outcome.

With the time of the meeting approaching, markets get increasingly tense again: just before noon, the forint fell back against the franc again, and stood at around 231. The euro, however, fell by the wake of a comment by Jean-Claude Juncker, chairman of the group of euro-zone finance ministers, who, upon arriving at the summit today in Brussels, said that a selective default on Greek debt cannot be ruled out under a new bailout plan for the country.