"Global investor sentiment turned a tad sourer that has shaken forint investors. Hungary's forint started Monday's session at a four-month high versus the euro but it began to ease after that. In early afternoon trade, however, the HUF started to appreciate sharply, breaking off from its regional peers.14:05
With no market moving news the HUF firmed abruptly to the EUR in the past half an hour or so by two notches from around 278.50. What is quite unusual is that neither the Czeck koruna, nor Poland's zloty moved in a similar pattern. None of the Budapest-based currency dealers whom Portfolio.hu has talked with could name any reason for this phenomenon.
European Central Bank (ECB) President Jean-Claude Trichet formulated a cautiously optimistic outlook on the European economy shortly before 13:45 CET, but this could hardly have been the reason behind the HUF appreciation, as it would have affected EUR/USD, as well, but there's no sign of that.
If Hungary's Parliament approves the government's tax proposals today, which would be regarded as mildly positive by investors, the forint is likely to gain support and remain at strong levels persistently.
08:19
Hungary's forint currently stands below 276 to the euro on the interbank market. The general good sentiment is supportive of other currencies in CEE, as well. By now the HUF has firmed 8% against the euro from its April bottom and Poland's zloty gained 6% since then.
Asian markets are showing a mixed performance which makes it hard to predict how CEE markets will react today.
The HUF has regained most of what it has shed this year, but the 262 level of early January is still far away. At the same time, the Hungarian economy does not necessarily need a forint that strong."
Source: Portfolio Online Financial Journal
12.05.2009