The forint is bursting with power today – it did something we did not expect

The forint strengthened sharply on news of the Brussels agreement. However, the rally appears to have stopped around 410 against the euro. But, on Wednesday, the Hungarian currency rebounded.

Wednesday morning

The forint was trading around 409.8 against the euro on Wednesday morning. That is a 0.2 percent gain for the Hungarian currency compared to Tuesday evening. On Tuesday, the EUR/HUF exchange rate was even at 408 after an agreement was reached in Brussels on Hungarian EU funds, bringing the country another step closer to disbursement, Portfolio reports.

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No lowering interest rates yet

The MNB announced its overnight deposit quick tender on Wednesday again at 18 percent interest rate. This means that it will not change the benchmark rate. The central bank does not seem to think that the time is ripe to start slowly lowering interest rates, despite the agreement on EU funds.

Wednesday forenoon – USD/HUF surprise

On Wednesday before noon, the forint strengthened again against the euro to around 408.15, half a percent higher than on Tuesday evening. The forint then strengthened further, with the euro was trading at around 407.2 at 11:30 AM, 0.8 percent lower than on Tuesday evening. At 12:40 PM, the EUR/HUF exchange rate was even nicer: 406.8.

The strengthening of the forint against the dollar was even more impressive: the exchange rate fell to 382.

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Source: Portfolio.hu