The Turkish lira, the worst performing major currency in Europe, the Middle East and Africa since June, will plunge in the first quarter as a corruption probe roils markets before elections, the top forecaster said.
Ukraine’s opposition set up a clash with the ruling party over a proposed cabinet shakeup, bolstering demands for the ouster of Prime Minister Mykola Azarov after the biggest street protests in almost a decade.
Hungarian assets are “cheap” because the government will probably obtain a financing agreement from the International Monetary Fund and the European Union, London-based Citigroup Inc. strategist Luis Costa said.
Hungary’s central bank cut its main interest rate to a record low and pledged “increased caution” as policy makers looked past a market rout sparked by the U.S. Federal Reserve saying it may phase out stimulus.
Hungary’s forint dropped to a nine- month low as falling inflation stoked prospects for interest- rate cuts and lawmakers backed constitutional changes some European Union members say undermine democracy.
The zloty strengthened for the first time this week and the forint snapped a three-day selloff after manufacturing growth in the U.S., China and Poland accelerated faster than forecast, easing concern about the global recovery.
Hungary may need to sell foreign- currency reserves to stem the forint’s decline to an all-time low versus the euro as lifting interest rates would be a “shot in the head” as the economy slows, Citigroup Inc. said.