Hungary's forint fell to a new 28-month low against the euro today after breaking a key support level.
At 8.24am the forint traded at 269.00 versus the euro - its lowest since December 2003 - down from 267.00 at the open and below a key support level of 268.00. Dealers said the currency was likely to fall further.
"A large foreign player is driving the market, it's not panic selling but somebody trying to make money on this situation," a dealer said.
"It's difficult to say what is driving what - the Polish zloty or the forint as the situation is pretty bad both there and here."
"I think if the forint weakens past 270, sooner or later the national bank will take a step. It's like in chess, the bank will watch and will feel when it's already a threat to the inflation target," the dealer said.
Bond trading has followed the forint and yields rose six to 10 basis points.
Trade has been moderate, but plenty of sellers appeared after the forint broke the 268 level, which indicates further yield rises to come, dealers said.