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EURHUF Pierces Below Key Short Term Support

HUF
EURHUF has pierced key short term support at 378.22, the Dec 14 low. The cross is down 0.17% on the day at typing, bringing this week’s total losses to 1.35%. HUF has been displaying resilience to greenback strength and equity weakness, and is among the top performers in the EMEA region again today. A sustained break of the aforementioned support level could expose the late November lows at 376.75.
  • HUF's outperformance this week coincided with a very well received FX bond sale. The government’s Debt Management Agency on Thursday announced the sale of a USD 2.5bln bond on international markets with strong demand for Hungary's FX-denominated bond line evidenced by pricing confirmed at midswaps +180bps from IPT of +200bps.
  • Looking ahead, CPI data on Jan 12 is the next key local economic release. Early estimates see headline inflation declining from +7.9% y/y in November to +5.9% in December. The continuation of favourable inflation developments will likely facilitate the 75bp base rate cut pace to be maintained by the next NBH at the next meeting on Jan 30.

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