Foreigners generate volatility on financial markets

The RON lost 0.5% against the euro again yesterday, after a new wave of foreign currency purchases by speculative players swept the forex market. Non-resident clients generated volatility on the stock exchange, as well. Most currencies and stock exchanges in the region thus witnessed significant declines, given that international investors preferred to close their positions on emerging markets to place their funds in assets denominated in dollars, lured by the interest raising prospects. The RON exchange rate calculated by the National Bank of Romania rose by 1.81 bani (100 bani – 1 RON), to 3.5382 RON/EUR. Compared with the year”s low, registered on May 9, the EUR/RON exchange rate is now up over 2%. The domestic currency, however, retains an appreciation against the euro compared with the start of 2006 of 3.7%. “The volumes traded on our market were not significant. The Magyar font and the Polish zloty were really volatile, and we just followed this trend. The upward trend of the exchange rate continues, but the 3.6 RON/EUR looks like a strong resistance,” the dealer of a bank commented. The day”s high was 3.5490 RON/EUR (for buying). The rise of the quotes towards 3.55 RON/EUR generated – almost instantly, interests to sell, especially on the part of the domestic clients. The local market closed in decline, with the euro falling to less than 3.54 RON due to sales of foreign currency. ZF