Forint wobbles in Fed, Greece suspense
The forint was trading at 311.96 to the euro late Wednesday on the interbank forex market, down from 311.59 late Tuesday. At 311.64 to the euro early Wednesday, the forint moved between 310.71 and 312.64, after a five-day low at 313.98 Monday intraday.
The Hungarian currency slightly wobbled, with the exchange rate edging up a little for a third day against the euro until late afternoon when it corrected down, while the US Fed was expected to signal a September rate hike later in the evening, and it looked unlikely the Thursday meeting of EU finance ministers would make progress on preventing a Greek default. The forint should not be expected to firm persistently until the fourth quarter, Takarekbank said in a note on Wednesday. The Hungarian central bankʼs change to its main monetary policy instrument as well as expectations for Fed rate increases will keep the the forint under pressure until then. Gradual, small-step improvements in Hungaryʼs credit ratings and an expected decline in the countryʼs external debt will help support the forint in the longer term, Takarek added. It expects euro/forint to end this year at around 300, and next year at 295 to the euro. Hungaryʼs central bank will cut interest rates to a new low of 1.50% next Tuesday but may then signal a pause in its easing cycle due to jitters over Greece and an expected rise in inflation, a Reuters poll found on Wednesday. The National Bank of Hungary (MNB) has been trimming its base rate in 15 basis point steps since March to 1.65% at present. The forint traded at 277.45 to the dollar, down from 277.02 late Tuesday. On Wednesday, it moved between 275.77, a five-day high, and 277.93, after a one-week low at 280.05 Monday intraday. It was quoted at 298.91 to the Swiss franc, down from 297.14 late Tuesday. Its range on Wednesday was 296.81 to 300.04. 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. |
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