HUF: EURHUF Reverses Earlier Gains, Trades Close to Recent Lows

After a brief uptick at the start of the session, EURHUF has returned back below 392.00 and is currently down a moderate ~0.1%, near last week's lows. Most emerging market currencies were hampered by the stronger dollar at the start of Monday’s trade after the failed assassination attempt over the weekend boosted Donald Trump’s odds of Presidency.

• The global risk-on sentiment has supported the forint since the local CPI release last Tuesday, resulting in a breach of support at the 50-day EMA for EURHUF. Nevertheless, conditions for the cross remain bullish for now, with a clear break of that average required to undermine the theme and expose 390.79, the 50.0% retracement of the May 28 - Jun 14 bull leg.
• More broadly, rising tensions between Hungary and the EU continue to pose downside risks to the forint, with Politico reporting recently that EU foreign affairs ministers are set to snub Hungary by organising their own foreign affairs summit in August instead of traveling to Budapest for Prime Minister Orban’s event.
• The NBH meet next Tuesday (July 23), where the central bank are broadly expected to maintain its cautious stance and keep rates unchanged at 7.00% despite a softer-than-expected inflation reading in June.