The dollar started to fall, and the forint is also watching this

In the early evening, the exchange rate of the domestic currency weakened slightly against the euro, currently at around 369.2, and against the dollar at around 342.4.

The weekly number of new jobless claims in the United States was higher than expected (it rose by 28,000 to 261,000 instead of the expected 235,000), leading some investors to believe that the Fed will stop raising interest rates next week, and this caused the dollar to fall against currencies. The euro/dollar rose gradually from around 1.07 in the morning to 1.077.

However, due to the weakening dollar, there was no meaningful strengthening of the forint against the euro, quotations were still stuck around 369, but the dollar/forint exchange rate fell to 342.5 on the interbank market.

Today’s reference yields on the secondary market indicate that the decline in yields on the government bond market has continued up to the 10-year segment, so that the 10-year benchmark is already approaching the 7% level. Today’s 10-year bond auction already produced an average yield of 6.98%, although this does not apply to the paper, which is currently still behind the reference yield.

The forint made up for the small weakening in the morning and in the early afternoon it is around 368.8 against the euro and around 343.6 against the dollar. EUR/USD saw only minimal gains during today’s trade to 1.073. Meanwhile, the collapse of the Turkish lira continues: against the dollar it has fallen by 0.7% since last night to 23.35, and against the euro by 1.2% to 25.25.

Inflation fell much more than expected in May, according to various indicators, mainly due to the drop in fuel and household energy, and this paves the way for further interest rate cuts by the central bank. This may also be related to the fact that the forint weakened a little in the morning trading: the quotations of the euro rose to around 369.5, but overall we can still talk about a relatively strong forint, close to a one-year peak, and the Hungarian currency even strengthened later to 369.

The inflation data, which caused a pleasant surprise, and the foreign trade balance data, which improved significantly, may be the main driving force today, although the preliminary public finance data for May will also be published at 11 a.m., which will highlight the extent of the slippage in this year’s budget approaching the halfway point of the year.

We also saw a slight weakening of the forint against the dollar to 345.

Meanwhile, the Turkish lira continued its downward spiral: against the dollar, it suffered another half-percent fall until this morning after yesterday’s 7.5% decline.

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