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Further HUF Retracement Could Ease Pressure on NBH Policymakers

HUNGARY
  • EURHUF ticks lower this morning, approaching its ST support at 376.60; a break below that level would open the door for a move down to 370 (key support). On the topside, resistance to watch stands at 380, followed by 383.20.
  • Last week, the NBH decided to raise its 1W depo rate by 50bps to 5.85% to ease the selling pressure on the forint as a weakening domestic currency keeps supporting inflation expectation.
  • This week, further retracement on HUF could ease the pressure on Hungarian policymakers, with the NBH pausing after hiking aggressively if the exchange rate falls below the 370 key level.

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