Forint Gains Second Day as Hungary Current Account Surplus Grows
The forint gained for a second day after data showed Hungary’s current-account surplus widened more than analysts expected and as demand for riskier assets increased.
The currency appreciated 0.4 percent to 290.71 per euro by 3:49 p.m. in Budapest. The forint gained 8 percent this year, the second-best performance among more than 100 currencies tracked by Bloomberg. Poland’s zloty has rallied 9.5 percent. Yields on Hungary’s 10-year government bonds fell two basis points to 6.16 percent today, matching the lowest since October 2005.
The current account surplus was 780 million euros ($1 billion), compared with 328 million euros a year earlier, the central bank in Budapest said in an e-mailed statement today. The median projection in a Bloomberg survey of four economists was for a 628 million-euro surplus. Emerging-market stocks headed for the highest close since April as U.S. lawmakers arranged meetings before a budget deadline and on speculation China will take steps to boost domestic consumption.
“Fundamentally, the strong external balance position could be supportive for the forint exchange rate,” Orsolya Nyeste, a Budapest-based economist at Erste Group Bank AG, wrote in a research report on the current-account release.
The positive effect on the currency from the surplus will probably be weakened by the Magyar Nemzeti Bank’s easing cycle, Nyeste added. Policy makers have cut the benchmark rate by 1.25 percentage points since August to 5.75 percent.
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