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HUF: EURHUF Pauses Rally But Key Resistance Still in Focus

HUF
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The forint is trading on more stable footing despite ongoing strength in the USD index, with EURHUF sitting a moderate 0.17% lower on the session at typing but still within close proximity to key resistance at 412.35, the Nov 6 high. Clearance of this level would open 415.92, the Dec 13 2022 high. Rising spot has been accompanied by a pickup in 1-month implied vols, which are re-approaching the post-election multi-month highs found shy of 8%.

  • CPI data for October crossed the wires earlier this morning but has done little to shift the needle. While the lower-than-expected headline reading will be welcomed by NBH policymakers, it is unlikely to have any near-term bearing on policy given that the plunge in the forint since the start of October has all but ruled out any potential rate cuts before year-end.
  • Indeed, UniCredit noted earlier in the week that if the bearish market sentiment towards the HUF does not improve, the NBH might even be forced to tighten monetary conditions in the next few months. The NBH meet next on November 19.
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The forint is trading on more stable footing despite ongoing strength in the USD index, with EURHUF sitting a moderate 0.17% lower on the session at typing but still within close proximity to key resistance at 412.35, the Nov 6 high. Clearance of this level would open 415.92, the Dec 13 2022 high. Rising spot has been accompanied by a pickup in 1-month implied vols, which are re-approaching the post-election multi-month highs found shy of 8%.

  • CPI data for October crossed the wires earlier this morning but has done little to shift the needle. While the lower-than-expected headline reading will be welcomed by NBH policymakers, it is unlikely to have any near-term bearing on policy given that the plunge in the forint since the start of October has all but ruled out any potential rate cuts before year-end.
  • Indeed, UniCredit noted earlier in the week that if the bearish market sentiment towards the HUF does not improve, the NBH might even be forced to tighten monetary conditions in the next few months. The NBH meet next on November 19.