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EURHUF Gradually Approaching Its Key Support At 370

HUNGARY
  • Last week, the NBH decided to leave its 1W depo rate steady at 6.15% this morning for the third consecutive week despite the HUF weakness.
  • After reaching a local high at 382.10 in the week following Orban’s victory, EURHUF has been consolidating lower in the past 10 days, currently testing the 373 level and gradually approaching its key support at 370.
  • We previously saw that HUF remains ‘extremely cheap’ using either a fundamental approach (BEER FX fair value) or historical ranges.
  • It is likely that the NBH will hike its 1W depo rate at its next ‘core’ policy meeting on April 26, and lower the ‘frequency’ of hikes to monthly steps if the HUF does not experience another sharp depreciation in the near term.

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