Emerging market stocks recovered some ground on Tuesday following the prior session's sharp sell-off, while the Hungarian forint held near five-month lows versus the euro ahead of a likely downgrade to the country's GDP forecast by the central bank. The forint fell 0.2% against the euro ahead of an interest rate decision at 1200 GMT. The Hungarian central bank is expected to stand pat as higher-than-expected inflation limited room for further meaningful stimulus for the sagging economy.
The dollar traded marginally higher Tuesday, helped by gains against the more defensive currencies, the Japanese yen and the Swiss franc, on the last trading day of the month. At 3:05 AM ET (0705 GMT), the U.S. Dollar Index, which tracks the greenback against a basket of six other currencies, stood at 99.597, up 0.3%. “The talk is Japanese names are short of dollars (as the fiscal year comes to an end), which is likely to keep the dollar bid well into London time,” Yukio Ishizuki, FX strategist at Daiwa Securities, told CNBC.
The Hungarian forint stabilised off a record low on Tuesday and the Czech crown swung to the strong side of a key psychological level as central Europe's currencies edged higher due to a pick-up in risk appetite. A slowdown in the number of new coronavirus cases in China provided some relief although markets stayed cautious, leaving gains in central European assets limited. The forint, after touching a record low of 339.20 to the euro at the end of last week, pushed 0.1% higher to bid mid-morning at 337.65.