Bloomberg News

Hungarian Forint Gains After Weakening Three Days Against Euro

July 09, 2012

The forint gained for the first time in four days against the euro, rebounding from the biggest decline in more than a week after Hungary’s trade surplus beat economists’ estimates.

Hungary’s currency appreciated 0.3 percent to 288.71 per euro by 10:32 a.m. in Budapest after losing 1.1 percent on July 6. Yields on the government’s benchmark 10-year bonds were little changed at 7.984 percent.

The trade surplus was 701 million euros ($860 million) in May, the statistics office in Budapest said today based on preliminary data. Economists in a Bloomberg survey forecast a surplus of 600 million euros. The forint fell last week after the central bank said a new tax on financial transactions proposed by the government may violate European Union rules.

“The better-than-expected trade balance may have played a role in the forint’s rebound,” Peter Karsai, a Budapest-based trader at Commerzbank AG, wrote in an e-mail today.

The first round of talks between Hungary, the International Monetary Fund and the EU on a credit line will take place between July 17-25, Mihaly Varga, minister in charge of the talks, said in an interview on public television station M1 today. The EU’s executive arm announced the start of talks on July 6 after Hungarian legislators approved amendments to a disputed central bank law which has blocked negotiations for more than seven months.

To contact the reporter on this story: Andras Gergely in Budapest at agergely@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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