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EURHUF Reverses Most of its Earlier Losses Amid Broader CE3 Weakness

EURHUF is operating within yesterday’s ranges so far, though today’s losses of ~0.2% see the local currency outperform both PLN and CZK despite little in the way of obvious catalysts. The cross, however, still stands relatively close to the overnight highs with attention therefore still on 384.23, the Nov 1 high, as the next resistance level to watch.
  • Attention will turn to global risk events and, in particular, the US CPI print later today and the FOMC meeting tomorrow. Any potential pushback from the Fed of market pricing for 2024 rate cuts will be closely watched with growing concerns that Hungary’s favourable interest rate differential will be eroded given the more benign domestic inflation print for November.
  • More news on the EU-funds front will be monitored following confirmation last week that EUR920m of aid will be disbursed and reports from Politico today that the European Commission is set to give approval to the gradual unfreezing of EUR10bn in cohesion funding for Hungary in exchange for partial progress in resolving rule-of-law issues raised by Brussels.

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