Wednesday June 25, 09:21 AM
Hungary's forint firms, joining region
BUDAPEST, June 25 (Reuters (LSE: TRIL.L - news) ) - Hungary's forint approached five-year highs against the euro in early trade on Wednesday, tracking other high-yielding currencies, but dealers said the market was relatively quiet.
Government bond prices also rose slightly, and domestic markets were eyeing Poland where the central bank is expected to hike interest rates by 25 basis points.
'Any surprise in Poland can have an impact on (Hungarian) markets through the zloty <EURPLN=D2>, and the (Polish central bank) comments can be also interesting,' one trader said.
The forint <EURHUF=D2> traded at 238.30 against the euro at 0732 GMT, firmer by 0.19 percent from Tuesday's close.
'Those who are short (in euro) are sitting in their positions calmly as they see no risk that the forint could ease in the short term,' one dealer said.
High-yielding markets in Europe shrugged off overnight falls by shares and bonds in Asia after weak U.S. consumer confidence data stirred concerns over the U.S. economy and doubts about the Fed's ability to hike interest rates later this year.
Hungary's central bank kept interest rates on hold early this weak, confounding analysts who had expected a hike, but its Deputy Governor Julia Kiraly said on Tuesday that the bank was ready to hike rates if its inflation target is threatened.
Figures released on Wednesday showed that Hungary's retail sales dropped by 1.5 percent in annual terms in April, a slower decline in demand after a 3.5 percent fall in March, but retail figures rarely have a market impact in Hungary.
-------------- MARKET SNAPSHOT AT 0732 GMT ---------------
EUR/HUF <EURHUF=D2> firms to 238.30 from 238.75
USD/HUF <HUF=> firms to 153.19/23 from 153.19/49
3-yr 2011/C bond yield down two bps at 9.72/80 pct
5-yr 2012/C bond yield down two bps at 9.32/40 pct
10-yr 2019/A bond yield down two bps at 8.52/62 pct
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(Reporting by Sandor Peto)
Hungary debt news [HU-DBT] Hungarian forint news [HU-FRX] Foreigners' Hungarian bond holding <.HUBONDHOLD> Foreigners' bond/bill holding duration <.HUBONDDUR> Emerging Market Debt [EMRG/DBT] Emerging forex [EMRG/FRX] All Emerging Markets news [EMRG] CEE indicators [CONV/DIARY] All East Europe News [EEU] E.Europe equities [.CEE] TOP NEWS -- Emerging markets [TOP/EMRG] TOP NEWS -- Convergence watch [TOP/EAST] Hungary indicators [HU/ECI] Czech indicators [CZ/ECI] Slovak indicators [SK/ECI] Polish indicators [PL/ECI] Keywords: HUNGARY MARKETS/FORINT
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