Forint Extends Pullback from Recent Highs as USD Strength Pressures EM FX

The forint is coming under moderate pressure Thursday morning as the uptick in the USD provides a headwind to broader EM FX, and in particular to CEEMEA currencies. EURHUF is up 0.25% on the day, but well within this week’s ranges, while USDHUF is a more notable 0.60% higher on the day. That pair has now recorded a 1.3% bounce from yesterday’s multi-month lows. Despite the relatively limited moves in EURHUF, the local currency is underperforming in the EMEA space.

• A familiar technical picture in EURHUF remains in play. The bearish theme remains intact with the latest recovery still appearing to be corrective. The cross found resistance at the 50-day EMA last week and a clear breach of that average is required to signal scope for a stronger retracement. On the downside, the recent break of support at 378.24, the Aug 30 low, strengthened the bearish theme though price currently stands above that level at typing.
• Hungary’s year-on-year PPI figure for October crossed at -6.6% earlier this morning – the lowest reading on record. There has been little else of note locally, with HUF performance therefore likely to continue to be influenced by wider global themes.