March 08, 2023 11:27 GMT
EURHUF Partially Reverses Earlier Gains on Virag Comments
EURHUF (+0.31%) has partially reversed some of today’s earlier gains amid broad CEE weakness (EURPLN: +0.21%, EURCZK: +0.44%) resulting from Fed and ECB rate re-pricing following Powell’s hawkish testimony yesterday.
- The EURHUF cross trades around the 380.00 level at the time of typing as comments from Deputy Governor Virag cross wires. He has reiterated that the central bank will continue its “disciplined” policy to curb inflation as soon as possible. Earlier HUF weakness followed comments from NBH Governor Matolcsy, who acknowledged that the central bank is at odds with the cabinet, and an expected 25.4% y/y inflation print.
- While the technical EURHUF trend remains bearish, the cross pierced initial resistance at the 20-day EMA, which intersects today at 381.26. On the downside, focus is on 370.82, the 1.382 projection of the Oct 13 - Nov 10 - Dec 12 price swing.
- The Budapest Stock Index trades 1.05% lower, again underperforming its regional peers as banking, pharmaceutical and energy companies struggle, while domestic yields sit 6-12bps higher across the curve, reflecting similar pessimism seen in the currency and across CEE.
- There are no risk events left on the calendar today, with trade balance data the next major economic release on Friday. Tomorrow, Prime Minister Orban, Finance Minister Varga and Economy Minister Nagy are set to speak on the economy.