Romanian leu dips on Trump's US election win but stays strong among peers - ING Bank analysts

Romanian leu dips on Trump's US election win but stays strong among peers - ING Bank analysts Author: Doinita Dolapchieva. Licence: All rights reserved.

BUCHAREST (Romania), November 9 (SeeNews) - Romanian leu softened in morning trading following the surprising victory of Republican candidate Donald Trump in the US presidential elections but the currency is still less volatile than its regional peers, ING Bank Romania analysts said on Wednesday.

Romania's central bank, BNR, set its reference exchange rate at 4.5100 lei per euro on Wednesday, compared to 4.5072 lei per euro on Tuesday.

"The RON softened c.0.2% yesterday, ending just shy of 4.51 lei per euro, while the overnight shocker of the Trump victory in US elections has already sent the currency a bit weaker this morning. Given uncertainties about what a Trump presidency will mean for the US (maybe protectionism with negative influences to global growth), there is a lot of turbulence in global markets, with sharp declines in equity markets in a sign of risk-off," ING analysts said in a daily financial markets snapshot.

Consequently, they added, the euro/ leu reaction over the short term depends on global developments, but the Romanian currency is historically a lower beta than regional peers, which have already softened more this morning.

Should the pair regain its upward momentum and head towards 2016’s highs, ING analysts said they would not rule out FX interventions, as they believe that one of the central bank’s lines in the sand is around 4.54.

"Overall, not a lot of upside for the EUR/RON as things currently look, especially as global market sentiment seems to be improving after the initial knee-jerk reaction," analysts concluded.

The leu changed hands between 4.5046 and 4.5185 against the single currency during the trading session, real-time interbank FX data published by local portal Conso.ro indicated.

(1 euro=4.5179 lei)

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