The forint gained a second day against the euro, heading for its strongest level in 11 months, as easing concern over Greece’s fiscal performance boosted investor appetite for emerging-market assets.
The Hungarian currency advanced 0.7 percent to 275.56 per euro by 1:41 p.m. in Budapest, heading for its highest close since Sept. 2. The yield on government bonds due in 2022 fell two basis points, or 0.02 percentage point, to 7.39 percent, the lowest in two weeks.
Greece and its creditors agreed on the need for more budget cuts to comply with bailout terms after more than a week of meetings in Athens as representatives of the European Commission, European Central Bank and International Monetary Fund said the country is making progress on meeting bailout terms. Hungary, which has the EU’s highest benchmark interest rate and is the bloc’s most-indebted eastern member, will resume financial aid talks with the IMF and the EU next month and hopes to seal an agreement “by the end of autumn,” Mihaly Varga, the government’s chief negotiator with the lenders, said July 26.
Developments in Greece “may lead to the pricing out of a prominent market fear, prompting a continuation of last week’s optimism,” analysts at Budapest-based brokerage Equilor Zrt. said in an e-mailed note to clients today.
The cost of insuring against default on Hungary’s debt with credit-default swaps fell 11 basis points to 434.337 basis points, the lowest since Sept. 9.
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