Free Trial
AUSSIE 3-YEAR TECHS

(U2) Still Above Key Support

USDCAD TECHS

Bearish Threat Remains Present

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access

HUF: Cheap But Risky

HUNGARY
  • Geopolitical tensions has been weighing on the HUF in the past two months, which remains extremely ‘cheap’ relative to major crosses (EUR, USD) despite NBH effort.
  • Last week, the NBH surprised the market and hiked its 1W depo rate by 50bps to 7.25% to support the forint, but the HUF continues to be driven by ‘external’ factors such as market uncertainty.
  • MT chart on EURHUF shows that the momentum still looks bullish. First resistance to watch on the topside stands at 400, followed by 402.90. On the downside, support to watch stands at 395, followed by 393.
  • HUF remains the most ‘undervalued’ currency among the G10/CEE world using a ‘fair’ value approach or historical ranges.
  • The forint is currently trading 30% below its fundamental value (vs. USD, using BEER FX model).
    • The chart below ranks the major G10 and CEE currencies based on their percentage difference between the current spot rate and their 'fair' value, which we define using a Behavioral Equilibrium Exchange Rate (BEER) model (using terms of trade, inflation and 10y interest rate differentials as explanatory variables).

Source: Bloomberg/MNI

189 words

To read the full story

Why Subscribe to

MarketNews.com

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.
  • Geopolitical tensions has been weighing on the HUF in the past two months, which remains extremely ‘cheap’ relative to major crosses (EUR, USD) despite NBH effort.
  • Last week, the NBH surprised the market and hiked its 1W depo rate by 50bps to 7.25% to support the forint, but the HUF continues to be driven by ‘external’ factors such as market uncertainty.
  • MT chart on EURHUF shows that the momentum still looks bullish. First resistance to watch on the topside stands at 400, followed by 402.90. On the downside, support to watch stands at 395, followed by 393.
  • HUF remains the most ‘undervalued’ currency among the G10/CEE world using a ‘fair’ value approach or historical ranges.
  • The forint is currently trading 30% below its fundamental value (vs. USD, using BEER FX model).
    • The chart below ranks the major G10 and CEE currencies based on their percentage difference between the current spot rate and their 'fair' value, which we define using a Behavioral Equilibrium Exchange Rate (BEER) model (using terms of trade, inflation and 10y interest rate differentials as explanatory variables).

Source: Bloomberg/MNI