EURHUF Pierces Key Support Level, Trades to New YTD Low

EURHUF (-0.50%) has pierced key support at 372.38 – the Mar 1 low – which has put the cross at a new YTD low as the forint outperforms its CEE peers. The break of the level opens the 370.00 handle and below.

• There is little in the way of domestic news flow or data driving the price action, with HUF continuing to be supported by last week’s hot inflation print that will strengthen expectations of the NBH striking a hawkish tone at next week’s rate-setting meeting.
• Options markets are moving in sympathy with spot, with the front-end of the risk reversals curve extending lower. The 1m contract has printed a lower low for eight consecutive sessions to fully erase the mid-March SVB crisis-inspired bounce. Vols trade similarly under pressure, putting 1m implied through 11 points to the lowest level since May last year.