Forex - Emerging Europe Closing Summary and Highlights 12 June

 15:34 (GMT) 12 Jun

  [Forex Highlights]

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Emerging Europe Closing Summary and Highlights 12 June (0101-LZVX-C01)


Most Hungarian government bond yields nudged down by up to 2bps on Wednesday but the forint extended its losses, underperforming its CEE-3 peers with the EUR/HUF briefly climbing to 321.92 after it exceeded the 321.70 resistance level. The currency suffered from comments by MNB director for economic analysis Andras Balatoni, who said that he was expecting CPI inflation to slow to near 3.0% y/y (the Bank's target) in H2 because of a fall in fuel and vegetable prices.


While the Russian government bond market was closed on Wednesday because of Russia Day, the ruble depreciated a bit in thin trading with the USD/RUB temporarily rising to 64.823. The currency was hurt by profit taking amid lower oil prices in the aftermath of the data from the Energy Information Administration and the American Petroleum Institute showing that U.S. crude stocks were up 2.2-4.9mn barrels last week compared to the expected 0.5-1.0mn barrel decrease. In addition, U.S. President Donald Trump said that he had no interest in making progress on the trade deal with China unless the latter agrees on four or five "major points".


South African government bond yields rose by 3-6bps across the curve on Wednesday and the rand weakened, underperforming other EMEA currencies with the USD/ZAR briefly rising to 14.8444. Assets suffered from comments by U.S. President Donald Trump that indicated his tougher stance on the U.S.-China trade deal as well as the release of anti-graft ombudsman Busisiwe Mkhwebane's letter to opposition Democratic Alliance leader Mmusi Maimane, in which Mkhwebane said that she had asked President Cyril Ramaphosa to respond by June 21 to her investigation into a campaign donation that Ramaphosa received from a company implicated in graft.


While Turkish government bond yields dropped by 16-70bps across the curve on Wednesday, the lira erased morning's losses in the afternoon. The USD/TRY temporarily fell to 5.766 after the CBRT left its benchmark repo rate unchanged at 24.00%, with the statement repeating that "the Central Bank will continue to use all available instruments in pursuit of the price stability objective". In addition, the Treasury announced that 12 banks would provide TRY 25bn in loans to companies on favorable conditions, with 80% of the package backed by the Credit Guarantee Fund.

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