"Hand in hand with the South African rand, the Turkish lira and the Polish zloty, the Hungarian forint altogether lost approximately 0.5% today against the euro, with a major slump followed by a small correction.By mid-morning, the forint weakened to its lowest level in more than a month with the exchange rate as high as 237. Subsequently, the trend turned around but the forint made only a minor advance to just below 236 by the late afternoon. In the meantime, the increasing possibility of a rate cut pushed government bond yields down by a noteworthy 15-20 bp for bonds maturing in 3 years or more.
Although the slump was kicked off by a highly disappointing preliminary report on Hungary's June industrial output released at 9 a.m. this morning, the weakening of other regional currencies indicates that the report was not the sole reason for the freefall of the forint.
After the opening rates of 235.10/235.40, it took only a few minutes for quotes to soar above 237, at which point the seller pressure subsided. For the rest of the day the exchange rate fluctuated mostly between 235.50 and 236.50 as the forint made a moderate recovery.
A comparative analysis of regional currencies reveals that between the mid-July all-time high and today's lowest point, the Czech koruna suffered the greatest loss (over 4%), followed by the Hungarian forint (over 3%) and the Polish zloty (1%). (The comparison does not include the Slovak koruna as the exchange rate vs. the euro is now fixed.)"
Source: Portfolio Online Financial Journal
07.08.2008