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HUF Extends Gains Against Major Crosses

HUNGARY
  • Momentum on HUF (and CEE) remains firm since the start of the month; the forint is up 2% against the US Dollar so far.
  • This morning, economic data showed that Hungary recorded a trade surplus of 187m Euros in December (vs. -109ml exp.).
  • Last week, the NBH decided to leave its 1W Depo rate unchanged at 4.3% as expected, after raising it by 30bps the week before.
  • Based on Barnabas Virag latest press conference, the NBH will now proceed with monthly hikes in the 1W depo rate and is likely to hike by another 30bps in February and March, which would levitate the effective policy rate to 4.9% in Q1.
  • EURHUF has been consolidating gradually lower in the past few days, currently trading slightly above the 353 level. ST support to watch on the downside stands at 352.50, followed by 350.90. On the topside, resistance to watch above 355 stands at 357.30 (200DMA).
  • Hungary 10Y yield has been consolidating lower after finding resistance slightly below the 5% level earlier this month. ST support to watch on the downside stands at 4.5930% (50DMA), followed by 4.50%.

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