15:50

The forint has continued to firm in the afternoon and its gains moved it to around 287.60 versus the euro. Meanwhile, global investor environment does not seem to be overly friendly, with US stock indices kicking off Tuesday’s trading with a 1% decline.

The rise in local government securities yields also continued. A local fixed-income dealer told Portfolio.hu that uncertainties such as the one triggered by the departure of the IMF/EU teams are like that, they bring about a sell-off.

He believes the best Hungary could do is to delve into reforms and launch austerity measures right after the local government elections in October. This is what investors have been waiting for since Fidesz swept into power in April, winning a two-thirds legislative majority.

13:11

PM Viktor Orbán’s remarks made at a press conference triggered some forint appreciation. He said the cabinet considers the 3.8% of GDP deficit target an obligation to be respected.

10:00

The forint has moderately eased over the past two hours against the euro and reached 290 again.

08:10

The forint has started today’s session slightly stronger than its late Monday levels and is currently quoted at around 288.80 to the EUR.

There is cautious optimism on global capital markets, which has a benign influence on emerging currencies, and both US and Asian markets look promising. As a result of the lighter mood the EUR gained to an over two-month high versus the US dollar.

The forint gained today against all key currencies. It firmed to 222 versus the USD from yesterday's peak at 225 and appreciated to 211 vs. the Swiss franc on the interbank market.

On the back of intense jitters triggered by the walkout of IMF/EU teams from talks with local authorities over the weekend Hungarian assets came under pressure on Monday. The forint was pushed to a 14-m low against the single European currencies, hammered to around 292, the weakest level it has been at since May 2009.

The weakening spree in the afternoon is especially interesting since it took place in a basically upbeat global sentiment.

The easing of the HUF could not be hampered even by forint-supportive statements by the central bank.

1) NBH Governor András Simor told a press conference yesterday that the bank will continue to convert EU funds on the market; and

2) The Monetary Council said in its official statement after it kept rates on hold for the third month in a row that "a sustained increase in risk premia may make it necessary to raise the central bank base rate."

Source: Portfolio Online Financial Journal