Hungary's forint has been relatively steady in calm trading versus the euro until 15:00 CET on Wednesday. A report about a new infringement procedure being on the way against Hungary, however, caused a sharp HUF depreciation, sending the forint to a new 1.5-month low.
Confidence undermined by such reports - 15:40 They still do not give much chance to Hungary reaching a deal with the IMF/EU by October and such reports are worsening the odds, Péter Bőhm, FX dealer at Raiffeisen, explained the reasons behind the forint’s abrupt weakening to Portfolio.hu. He sees only a 10% chance of a credit agreement in October and projects that EUR/HUF will be at 290 a month from now. HUF hammered - 15:33
A report that Brussels is likely to start an infringement procedure against Hungary in late Septemer over the financial transaction tax the government also wants to levy on the central bank (NBH) delivered quite a blow to the forint. The Hungarian currency eased to around 286.50 versus the euro, which marks a new 1.5-month low.
It seems the forint is being hammered over Hungary-specific news, as Poland’s zloty and the Czech koruna have not depreciated to the EUR.
The European Commission may launch infringement procedure against Hungary on 27 September over the financial transaction tax Budapest plans to introduce in 2013, Bruxinfo reported on Wednesday. Click here for more.
EUR/HUF north of 285 - 09:03
Following a stable start the forint has started to ease on Wednesday morning on the interbank market. This has to do not only with a moderately worse global investor sentiment, but probably also with Antal Rogán’s remarks. The head of the ruling Fidesz party’s parliamentary caucus told a local daily that Hungary will be able to ink a credit deal with the IMF/EU by the end of the year, while the official government communication has always been about an autumn deal.
Investor sentiment has turned slightly dourer on global money and capital markets. While it initially has left the forint unfazed, the Hungarian currency has started to ease versus the euro shortly after opening. The HUF, however, remains in a range it has been stuck to over the past few days. No key macro release is in the pipeline either in Hungary or abroad today, but the long-delayed loan programme review in Athens by international organisations’ (EU/ECB/IMF) is to begin now. However, we will not be informed about the results for quite some time, as Berlin signalled yesterday.
Gloomy day, steady forint - 08:25
At the end of the Tuesday session U.S. stock market indices rose moderately, but the improvement proved only temporary and Asian markets already show signs of a more bitter mood (main indices down by about 1%). Meanwhile, EUR/USD also rebounded from the 1.26 mark it has been trying to breach for days (it is around 1.2520 now).
As a result of the above, EUR/HUF went from around 284 late on Tuesday to 284.50 by Wednesday morning, which means the forint remains in the range it has been for days versus the euro.
The US dollar’s appreciation led USD/HUF north of 227 from around 226 late on Tuesday. The HUF is currently quoted around the middle of the 236.00/237.50 range on the interbank market.
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