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HUF: EURHUF Extends This Week's Rally, Narrows Gap to YTD High

HUF

EURHUF is trading at a new weekly high as the sustained recovery in the dollar from its post-CPI lows keeps the pressure on EM FX. Focus remains on the Mar 12 YTD high of 399.75, with the cross 2% higher on a month-to-date basis at typing. Only the Mexican peso and Colombian peso have underperformed the forint in the same time frame amid a broad unwind in EM carry trades.

  • The NBH decision on Tuesday is the next key risk event where the central bank is expected to decide between a 25bp or 50bp rate cut, with sell-side consensus leaning towards the former. Deputy Governor Virag has repeatedly stated that he sees the base rate within the 6.75-7.00% range by the end of June, effectively leaving the central bank with just the two aforementioned options.
  • Fitch may review Hungary’s sovereign credit rating after hours today (current rating: BBB; Outlook Negative).

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