The euro abruptly leapt to 4.2 RON yesterday afternoon on the interbank forex market in Bucharest, gaining around 1% on the early day level, after foreign players bought large amounts of foreign currency, desperately seeking to close their RON positions.
Dealers say investors reacted strongly to the bloody events in Athens, fearing problems could spread to other countries in the region, with the word "panic" returning to memory after a period of time during which things appeared to be calming down.
"The big wave of foreign currency purchases came when they announced deaths resulting from the clashes in Athens. The resistance level was breached, and many stoplosses were triggered (preset orders to close positions by buying foreign currency in order to limit losses i.e.)," comments the dealer of another bank.
Towards the end of the day the market calmed down somewhat, with the euro sliding towards 4.19 RON.
"The markets are very sensitive and very inflamed. Events in Greece have brought the entire region under pressure, with the Romanian market no longer being considered as less correlated with its neighbours because of talks of taxation tightening. All the talks about tax raises have brought us in line with the region, and today (yesterday i.e.) the regional sentiment is extremely negative," says Dorin Badea, UniCredit-Tiriac Bank treasurer.
The euro abruptly leapt to 4.2 RON yesterday afternoon on the interbank forex market in Bucharest, gaining around 1% on the early day level, after foreign players bought large amounts of foreign currency, desperately seeking to close their RON positions.
Dealers say investors reacted strongly to the bloody events in Athens, fearing problems could spread to other countries in the region, with the word "panic" returning to memory after a period of time during which things appeared to be calm
