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The forint starts the day at 368.7 on Thursday morning, which is pretty much the same as on Wednesday night. By contrast, yesterday the forint weakened significantly, by one percent, so it is now within reach of its all-time low of 369.6 at the end of March.
From here, we can see a record euro exchange rate at virtually any time.
The weakening of the forint in recent days was mainly due to the deterioration of international sentiment, with investors worried about the upcoming US presidential elections and the spread of the coronavirus epidemic. More and more people believe that the second wave of the epidemic in the fourth quarter could put the economy back in a difficult position. And in the run-up to Tuesday’s presidential election, uncertainty is now the biggest factor and, for the moment, there is a realistic chance that Joe Biden and Donald Trump will win.
In this situation, in addition to the forint near the low point, the MNB’s one-week deposit bid today may be more important than usual. The central bank has repeatedly pointed out that deteriorating international sentiment is the main threat to the inflation outlook. In late September, the MNB raised the underlying asset interest rate by 15 basis points, in part citing this. As usual, today’s tender interest may appear shortly before noon, and then the result may arrive at three in the afternoon. We are now at 313.68 against the dollar, while the British pound will cost 408.5 guilders.
Among the regional competitors of the forint, the Polish zloty begins the day by strengthening 0.2% after yesterday’s weakening, that is, it is trying to correct, while the Czech crown remains stagnant. In the emerging market, the Turkish lira has once again been in the sights of investors, and we have again seen an unstoppable weakening in recent days. The currency showed another 0.3% drop this morning, while the South African rand strengthened 0.3% against the dollar.
The strengthening of the dollar in recent days has also not been good for Central European and other emerging currencies, which also indicates a strengthening of global risk aversion. The euro-dollar was around 1.1756 on Thursday morning, a 0.1 percent correction from the drop in recent days. The Japanese yen barely moved, while the British pound strengthened 0.3%.
Cover image: Getty Images
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