Continuous weakening: Forint cannot be saved by EU funds news

On Wednesday morning, the forint started weakening against the euro again. The exchange rate is once again hovering above 390. Despite encouraging news on EU funds and attempts to strengthen on Tuesday, there was no significant momentum.

The forint was trading around 391.15 against the euro on Wednesday morning. This meant a 0.3 percent weakening for the Hungarian currency. Yesterday, the forint tried to strengthen, with the exchange rate sinking to around 386: however, by the evening, the it was weakening again, Portfolio reports. (Read about the good news on EU funds HERE.)

The market is still primarily concerned about the rise in US bond yields, with the overseas 10-year already at 4.87%. Seeing the trend, the only question is when it will reach the critical 5% level.

The forint is now trading at around 373.5 against the dollar, while the pound is at 450.3.

Among the region’s competitors, the Polish zloty and the Czech koruna also started the day with minimal losses of 0.1 percent. In emerging markets, the Turkish lira weakened by half a percent against the dollar and the Russian rouble by 0.3 percent.

The strengthening of the US currency has not been good for the forint and other emerging market assets, Portfolio writes. Yesterday, the dollar climbed back below 1.05 against the euro and is now trading near 1.045, which represents a further 0.1% strengthening of the US currency.

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