Forint eases on interbank market
The forint was trading at 306.59 the euro late Tuesday on the interbank forex market, down from 305.73 late Monday. At 305.70 the euro early Tuesday, the forint moved between 305.65 and 306.66, a one-week low. It touched a new close to six-month high at 303.63 on Friday.
With Hungary's economic growth set to struggle now that EU funding has past its peak, and inflation likely heading deeper into negative territory, Commerzbank expects the central bank to restart its easing cycle and lower the benchmark rate to 1.7% by the first half next year, from the current 2.1%. This, and a possible intervention against the forint's strength next year, aiming to generate inflation pressure, could see the forint heading down to 315 to the euro by June 2015, Commerzbank said in a note on Tuesday.
The euro correcting upwards in dollar terms after a plunge late last week also played against the forint.
However, the OPEC meeting later this week could be key for the Hungarian forint in the short term, UniCredit said. Hungary is reliant on energy imports and has been benefiting from the sharp fall in energy prices so far trough bolstering its trade and current account surplus.
An auction of three-month discount Treasury bills saw unchanged yields with bid to cover ratio falling to 3.25 from the previous 4.08. Allotment was in line with the HUF 30 bln offer.
The forint traded at 245.74 to the dollar, slightly up from 245.87 late Monday. On Tuesday, it moved between 245.53 an d 246.78, an eight-day low. Last Friday it touched an almost one-month high at 241.95. It was quoted at 254.86 to the Swiss franc, down from 254.22 late Monday. Its range on Tuesday was 254.09 to 254.98, a one-week low. It reached a more than one-month high at 252.53 on Friday.
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