Forint Snaps Eight-Day Drop After U.S. Payrolls: Budapest MoverMarton Eder
Hungary’s forint appreciated for the first time in nine days after lower than expected U.S. payroll figures fueled bets the Federal Reserve may delay curbing the bond buying that has triggered gains in emerging assets.
The currency strengthened 0.8 percent, the largest daily gain among 31 major currencies tracked by Bloomberg, to 298.22 per euro by 5:52 p.m. in Budapest, trimming the decline this week to 0.4 percent and erasing an earlier drop of 0.1 percent. The forint’s recovery from a three-month low was helped by a report that quoted a central bank official as saying the rate will not threaten the nation’s financial stability.
The 162,000 increase in U.S. payrolls in July was the smallest in four months, Labor Department figures showed, missing the median estimate of 93 economists on Bloomberg. The Fed said this week persistently low inflation may hamper economic growth, and pledged to keep buying $85 billion in bonds every month. In May, the Fed signaled the program could be tapered should the economy show sustained improvement.
“This news is emerging-markets positive,” Karoly Bamli, a Budapest-based trader at Commerzbank AG, said by phone. “Had the data been better, we would be at 301 forint per euro.”
The forint depreciated 1.4 percent in July after government plans to phase out foreign-currency mortgages and the central bank’s pledge to continue cutting interest rates dented the currency’s allure.
Hungary’s central bank has no exchange-rate target, Managing Director Daniel Palotai said in an interview with news website Portfolio today. In cases of drastic changes in the rate, “subtle verbal signals” have been enough to stabilize markets, he said.
“The current rates near 300 forint per euro cannot be considered exceptionally weak,” the Economy Ministry said in an e-mailed response to questions.