Hungary forint eases north of 416 versus euro
Back over 416 - 16:16
The forint continues to fall after the opening of US markets. The euro is trading back above the 416 level, approaching 416.80, making another historic low in the afternoon, as seen throughout the day.
HUF north of 416 against the euro - 15:34
On Wednesday, the forint continued its dramatic weakening, which was already evident at the beginning of the week. However, the depreciation of the domestic currency accelerated in today's trading, with EUR/HUF rising from 406 in the morning to 416 in the afternoon (from 400, a 4% easing). Since then, the exchange rate has moderated somewhat, correcting back below 415 from near 416.80.
Against the USD, the forint depreciated to 409 and then corrected back to under 407.
Government security yields rose on all maturities. in Wednesday's trading, but 3-year and 5-year bond yields jumped the most, with the former up 48 basis points and the latter 44 basis points.
However, looking back to the days before the outbreak of the war, the chart below shows that the forint absolutely stands out from regional currencies, with the Czech koruna essentially flat despite the central bank's massive intervention to protect it, and the Polish zloty showing much less weakness, and only in recent days.
The government has not made a single remark about the mesmerizing weakening of the national currency, although a host of government officials talked about various issues over the last few days, including "wartime inflation" caused by the Russia-Ukraine war, a new special tax on 'extra profits' of banks, the need to protect the cabinet's achievements (including jobs, family subsidies, pensions), the hope that Hungary will be able to broker a deal with the European Commission on unblocking EU funds by the autumn, and that Hungary will reduce its public debt twice as much as the EU average in the next two years.
EUR/HUF hits 413 - 14:35
The EUR/HUF exchange rate crossed north of 413 on Wednesday afternoon. The forint weakened 1.3% since yesterday, as it kicked off Tuesday's trading around 400, which means it eased more than 13 units in less than two days. Against the USD the forint is quoted at 406.2.
Cover photo: Getty Images
