HUF: CEE FX Sentiment Hampered by Sustained Greenback Recovery

The sustained recovery in the USD index from this week’s lows has kept the pressure on EM FX. HUF performs in-line with its CE3 peers today, with EURHUF 0.22% higher at typing. Given the cross remains within close proximity to recent highs, attention is still on 399.75, the Mar 12 high and key resistance level. While local drivers have been limited since the NBH meeting last week, broader CEE FX remains sensitive to political developments in Europe and swings in global risk sentiment.

• Data this morning showed Hungary's current account moved to a record surplus of EUR 1.860bn in Q1 (Est: EUR 1.786bn; Prior -EUR 593.6m), though this did little to move the needle given a sustained rise in the nation’s current account balance has been forecast by the central bank.
• PLNHUF is little changed on the session, trading above 92.00 for the second day in a row. The cross matched the Mar 25 high of 92.30 yesterday, a break of which could expose the Mar 12 multi-year high of 93.23. The CNB rate decision tomorrow provides the key risk event in the CE3 region this week, where both 25bp or 50bp rate cut options are on the table.