The forint also passed its daily low

In the early evening hours, when the leading European indices came to a halt, the forint also increased its losses, weakening against the euro to 393.865, then with a faster strengthening, it started to fall sideways at around 392.8.

According to the signs, the market concern around the US banking system is easing with a series of reassuring messages from the main decision-makers, and this is also reflected in the fact that after the opening, the US stock markets show a small increase compared to Friday’s closing level. This also brought a significant turn in the positive direction on the Hungarian stock markets (OTP Bank’s share price softened from an 11% drop to a 5% drop, and Mol’s 6% drop came back to almost zero), but meanwhile it is noteworthy that the forint essentially has now fallen to a daily low. The quotations of the euro fell back to around 393, and those of the dollar rose to 366.

With today’s fall, the forint reached a one-month low against the euro.

As we pointed out in our separate quick analysis: the forint is spectacularly underperforming among regional currencies today, and we listed three possible fundamental and three technical factors behind this.

The HUF was also around 366 against the dollar today, which also represents a one-month HUF low:

In parallel with the American president’s recent speech and the emphasis on reassuring messages, the leading Western stock markets have started to recover from their lows, and at the same time the forint is also starting to recover from the fall that lasted until the early afternoon. The quotations of the euro have just dropped below 390, those of the dollar fell below 364.

After the rapid fall of the forint in the early afternoon, which also brought euro quotations above 393, there is now a slight stabilization and calm: the euro quotations are now fluctuating around 391. This still means that we are almost 10 units above the morning quotations and compared to the field of regional currencies, the fall of the forint is extremely large (the Polish zloty and the Czech koruna only show a fall of around 0.4-0.5%).

The unprecedented and extraordinary drop in yields experienced on the American and German bond markets (rapid repricing of interest expectations, flight to safe assets) also led to a moderate decrease in yields on the Hungarian government bond market. The 3-year and beyond segment of the yield curve essentially shifted down by 20-30 basis points.

The forint was reduced from 393 to 391, 390 forints cost 90 fils to one euro. Within the day, it is still 2.1% weaker against the euro. The weakening of the forint was triggered by American news, and the stock markets also fell.

The sellers are hooked, the euro is already above 392, the quote is 393.4. Now the fall has really started after breaking through the 390 level, the quotation is approaching 393 from below. It is now down 2.5%.

The forint has already passed 391, and it continues to weaken against the euro due to the news about the bank failure. It is already down 2.2% against the euro, the fall is serious. The dollar is down 0.5%, compared to how much concern there is in the US market, this does not seem like a major move.

The forint is still under weakening pressure: in the last half an hour, the euro was quoted above 389 on the interbank market, and now it is still trading around this, and the dollar exchange rate fluctuates around 364.5.

In the still negative international investor sentiment, the euro jumped again above 388 on the interbank forint market, and the dollar to 364. This means that the concerns about the American banking system (and its potential spillover effects) have not subsided even with last night’s coordinated American announcements. Moreover, in the market now, the “flight to safety at any cost” may be the main driving force behind the fact that such a large bank failure happened almost overnight, and now many investors are running for cover until the valuations are completed or until the “storm” passes. Our separate news feed on American developments is available here.

In the past half hour, after the rapid fall, the exchange rate of the forint is showing a turnaround: the quotations of the euro dropped from above 388 to below 387, the dollar exchange rate dropped from 364 to around 362.

The rapid weakening of the forint continues: the quotations of the euro have just crossed the 388 level. The dollar exchange rate is already at 363.8.

The forint is falling at a rapid pace due to the international market tension: in the last minute, the euro has crossed the level of 387, even though it was still trading at 382 around 10:00. The dollar rate jumped to 363.

In the deteriorating international market sentiment, the euro jumped above 386 on the interbank forint market, i.e. the forint fell to a one-month low. Dollar quotations rose to around 362 on the market.

The re-strengthening of the dollar and the deterioration of foreign stock market sentiment are starting to affect the HUF as well: in the last hour, the euro’s quotes jumped from 382 to 385, and the dollar/HUF exchange rate went above 360. In the meantime, OTP’s share price fell by more than 3% on the BÉT.

After the initial breathing rally, the mood on the international stock market turned gloomy again in the morning, the European stock markets are headed for a big fall again, and the dollar started to strengthen again against the euro. Quotations fell from 1.074 to 1.067, and at the same time, the HUF was also hit: quotations against the euro jumped from 382 to 384. As you can see: the trend line already highlighted in our morning article and also drawn below holds for the time being, the HUF has not been able to recover below it.

As we wrote last night: three pieces of news from the US financial regulatory authorities appeared at the same time:

1. All Silicon Valley Bank depositors are fully protected.
2. Closing Signature Bank on Sunday and compensating its depositors similarly.
3. The Fed provides additional financing to eligible banks so that the banks can meet the needs of all their depositors.

Together, these strengthened the appetite for risk on Monday morning, together with the fact that Goldman Sachs had already announced that the Fed would stop raising interest rates in order to prevent the banking system problem from spreading further. Together, these weakened the dollar against the euro, with quotes rising from 1.064 on Friday evening to over 1.07.

The fall of the dollar and the rise of (future) stock indices together helped the emerging market currencies, so the forint was also able to strengthen a little in Monday morning trading, although this seems to be temporary: from Friday evening’s close of 383, the forint strengthened to close to 381, and then The quotations rose to 382.5. As we have drawn: the Hungarian currency is teetering on an important technical line.

And this line is none other than the trend line drawn to the local EURHUF highs of last December and February of this year, which the exchange rate carried over on Thursday evening in addition to the American banking tensions that erupted at the time, and remained above this line throughout Friday, and it was retested this morning. Based on the rules of technical analysis, the EURHUF will spring upwards after the line is broken upwards and then retested, i.e. the weakening of the forint would look like from this technical formation.

The weakening of the dollar on Friday and this morning and the fluctuation of the forint together led to the fact that the dollar/forint quote fluctuated around 357 this morning on the interbank market.

As we indicated in our weekly macro preview this morning: more important macro data is expected from tomorrow, mainly from abroad, and on Wednesday we will have a public holiday due to a national holiday, but markets abroad will be open.

Cover image source: Getty Images