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HUF: EURHUF Resumes Wednesday’s Gains, Trading at Fresh Cycle High

HUF
CEEMEAEM BulletBulletEmerging Market NewsHungary

EURHUF has resumed yesterday’s gains, up 0.2% on the session and at a fresh cycle high. The cross closed above key resistance at 412.35 on Wednesday, the Nov 6 high. Above here, we flag 415.92, the Dec 13 2022 high, as the next resistance level of note. While HUF weakness appears to lack a specific driver, geopolitical tensions and international trade concerns continue to hamper the wider EM FX basket, with the forint particularly sensitive to such matters.

  • In addition, local focus has been on the impending announcement of a new NBH Governor. Matolcsy has often been at odds with government officials over the NBH’s hawkish policy mix, and so Finance Minister Varga’s likely appointment may raise the prospects of rapid rate cuts next year given that the new management team will be given a mandate directly from the Prime Minister.
  • Still, the general view among analysts is that Varga is ultimately unlikely to stray too far, too quickly from the current regime’s tight stance given the weak position of HUF. According to former central bank officials who spoke to MNI earlier this month, Varga’s leadership of the NBH is unlikely to be “radically different.”
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EURHUF has resumed yesterday’s gains, up 0.2% on the session and at a fresh cycle high. The cross closed above key resistance at 412.35 on Wednesday, the Nov 6 high. Above here, we flag 415.92, the Dec 13 2022 high, as the next resistance level of note. While HUF weakness appears to lack a specific driver, geopolitical tensions and international trade concerns continue to hamper the wider EM FX basket, with the forint particularly sensitive to such matters.

  • In addition, local focus has been on the impending announcement of a new NBH Governor. Matolcsy has often been at odds with government officials over the NBH’s hawkish policy mix, and so Finance Minister Varga’s likely appointment may raise the prospects of rapid rate cuts next year given that the new management team will be given a mandate directly from the Prime Minister.
  • Still, the general view among analysts is that Varga is ultimately unlikely to stray too far, too quickly from the current regime’s tight stance given the weak position of HUF. According to former central bank officials who spoke to MNI earlier this month, Varga’s leadership of the NBH is unlikely to be “radically different.”