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Forint Outperforms CE3 Peers Amid Favourable Developments Re. EU Funds

HUF
The forint is outperforming its CE3 peers again this morning, with EURHUF down 0.20% on the day and through yesterday’s lows (PLNHUF: -0.31%; CZKHUF: -0.25%). Positive developments for Hungary regarding frozen EU funds likely supporting the currency, with EUR10bln of funds set to be released today (though no specific timing has been disclosed).
  • Key support has been defined at 375.62, the Nov 14 low. A break would resume the downtrend and open 373.98, the 76.4% retracement of the Jun 12 - Aug 3 bull leg.
  • Focus shifts to the Fed rate decision this evening where market participants will be closely watching for any potential pushback on pricing for rate cuts in 2024. While a hold decision is unanimously expected, any dovish signals could support the HUF given its still-favourable carry profile with NBH policy increasingly predictable. The next NBH meeting is on Dec 19, where consensus so far sees another 75bp rate cut.

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