Just below 210, the exchange rate of the forint vs. the euro is also near a 2-week high. Major fluctuations were observed only in the USD/HUF currency pair; the forint has gained almost 7% since the end of June and is currently at a 3-week peak around 220.

This week saw the end to what seemed like a steady decline in market sentiment, with US stock markets apparently "learning to forget" about negative economic outlook and the spectre of a double-dip recession. The positive environment supported rising stock indices, while the lack of major new concerns for the Eurozone has helped spread a spirit of positive expectations worldwide. As usual the forint thrived amid the general optimism; the depreciation of the currency came to a halt and turned around after the end of June.

After several hours of dithering, the exchange rate of the forint vs. the euro crossed and stayed permanently below the 280 mark on Friday afternoon CET, its strongest since 24th June.

Hungarian homeowners weighed down by massive Swiss franc mortgages could also breathe a sigh of relief as the weakening of the forint came to an end, plus some commercial banks have agreed to pitch in by easing loan terms. The CHF/HUF rate sank to 210 this afternoon, so far the lowest in July.

The resurrection of the euro in the global marketplace (especially in relation to the US dollar) has resulted in intense volatility in USD/HUF quotes, which came down from over 230 to the vicinity of 220 over the past days. The forint gained approximately 7% vs. the US dollar since the end of June and is currently stands at the mid-June level.

Considering its performance vs. the euro in a regional comparison, the forint has moved in perfect synchrony with the Polish zloty (apart from a few days of temporary delays), while the Czech koruna zoomed past its regional peers and is currently at a 2.5-month peak at 25.3 as the national economy is picking up.

The secondary government bond market has witnessed minor shifts, with yields in the range of +/-2 to +/-5 according to State Debt Management Agency data."

Source: Portfolio Online Financial Journal