Forex - Emerging Europe Closing Summary and Highlights 25 Mar

 16:23 (GMT) 25 Mar

  [Forex Highlights]

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Emerging Europe Closing Summary and Highlights 25 Mar (0101-KDDL-C01)


While Hungarian government bond yields nudged down by up to 3bps across the curve on Monday, the forint gained slightly on short covering, with the EUR/HUF briefly falling to 315.82.


Most Russian government bond yields decreased by 6-11bps on Monday and the ruble appreciated, erasing some of the losses it suffered at the end of last week with the USD/RUB temporarily falling to 63.984. Assets were driven by a report from Special Counsel Robert Mueller, which found no evidence that U.S. President Donald Trump's campaign "conspired or coordinated with the Russian government" in the 2016 election, as well as mineral extraction tax, excises and VAT remittances leaving the system.


While most South African government bond yields ticked up by up to 2bps on Monday, the rand strengthened on short covering, with the USD/ZAR briefly falling to 14.2769. The currency was helped by comments from power utility Eskom, which said that no load shedding was expected in the coming week.


Turkish government bond yields rose by 46-176bps across the curve on Monday but the lira gained with the USD/TRY temporarily falling to 5.5569, outperforming other EMEA currencies and recovering part of heavy losses it suffered at the end of last week. The currency was helped by comments from the CBRT, which said that it would "use all monetary policy and liquidity management instruments to maintain price stability and support financial stability, if deemed necessary" and was "decisive about its policy towards reinforcing its reserves". In addition, the Bank raised the limit on FX swaps before maturity to 20% from 10% and did not open either one-week daily FX swap or repo auctions. But the banking watchdog BDDK said at the weekend that it launched a probe into JP Morgan and other banks after JP Morgan allegedly recommended to go long on the USD/TRY in its report published last Friday. Furthermore, President Tayyip Erdogan said that the bankers creating excess FX demand would "pay a heavy price for that after the elections".

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