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EM FX: Greenback Strength Weighs on EMFX, But Moves Relatively Contained for Now

EM FX

The spike in the greenback following the US inflation data has unsurprisingly weighed on EM FX in the immediate aftermath of the release, with the higher-than-expected M/M core and supercore readings reflecting stronger pressures across all major sub-categories.

  • USD/CE3 pairs are between 0.3-0.4% higher at typing, completely reversing pre-data losses. Following outperformance earlier today, the Hungarian forint lags the rest of the EMEA FX basket at the margins, though both USDHUF and EURHUF remain below pre-Hungary CPI levels. Similarly, USDPLN and USDCZK remain below yesterday’s opening levels.
  • Despite weakness across the commodities space, gains for USDZAR are lagging that of the Bloomberg Dollar Index. Key short-term resistance remains some way off at 19.2296, the Jan 13 high.
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The spike in the greenback following the US inflation data has unsurprisingly weighed on EM FX in the immediate aftermath of the release, with the higher-than-expected M/M core and supercore readings reflecting stronger pressures across all major sub-categories.

  • USD/CE3 pairs are between 0.3-0.4% higher at typing, completely reversing pre-data losses. Following outperformance earlier today, the Hungarian forint lags the rest of the EMEA FX basket at the margins, though both USDHUF and EURHUF remain below pre-Hungary CPI levels. Similarly, USDPLN and USDCZK remain below yesterday’s opening levels.
  • Despite weakness across the commodities space, gains for USDZAR are lagging that of the Bloomberg Dollar Index. Key short-term resistance remains some way off at 19.2296, the Jan 13 high.