Investors are beginning to calm down after panicky mood swept through markets late on Wednesday and Thursday. Currency markets are also showing signs of correction, which let up the pressure on emerging market currencies too. Hungary’s forint eased to 300 versus the euro but on Friday morning it has gained some distance southbound from this psychological level.
Federal Reserve Chairman Ben Bernanke’s confirmation that the Fed is preparing to stop pouring tens of billions of dollars into the bond market has taken care of virtually all markets. U.S. stock indices plunged on Thursday, and the forint extended its three-day dive to 2.7%, the biggest among the 24 emerging-market currencies tracked by Bloomberg. Investors have settled down only by Friday morning. Asian markets are showing mixed performances, but the Japanese stock index is already up.
As a result we can see a correction on FX markets too. The USD has slightly weakened to the euro and emerging market currencies have also gained some distance from their lows hit late on Thursday.
The forint reached a key psychological level at 300 vs. the euro late yesterday, but it has regained some strength today morning and is currently quoted at around 298.50.
EUR/HUF 300 marks a nearly two-week low for the Hungarian currency.
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