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HUF: Forint Continues to Reverse Post-Election Sell-Off

HUF
  • The post-election sell-off in HUF prompted money markets to briefly indicate around ~25bps of hikes in the next three months – as evidenced by 3x6 FRAs.
  • While we are back to pre-election pricing, the potential of a strong hawkish reaction from the NBH to the uncomfortably low levels of HUF have underpinned the currency’s solid recovery.
  • Indeed, EURHUF (-1.15%) has more than reversed Wednesday’s move, while USDHUF is not far off Tuesday’s closing levels. PLNHUF, which closed above 84 for the first time ever yesterday, is back below that handle and now close to flat on the week.
  • While HUF’s recovery is outpacing that of its regional peers, the currency is moving in tandem with PLN. Regional focus today is on the CNB rate decision and NBP post-meeting press conference – both later this afternoon.
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  • The post-election sell-off in HUF prompted money markets to briefly indicate around ~25bps of hikes in the next three months – as evidenced by 3x6 FRAs.
  • While we are back to pre-election pricing, the potential of a strong hawkish reaction from the NBH to the uncomfortably low levels of HUF have underpinned the currency’s solid recovery.
  • Indeed, EURHUF (-1.15%) has more than reversed Wednesday’s move, while USDHUF is not far off Tuesday’s closing levels. PLNHUF, which closed above 84 for the first time ever yesterday, is back below that handle and now close to flat on the week.
  • While HUF’s recovery is outpacing that of its regional peers, the currency is moving in tandem with PLN. Regional focus today is on the CNB rate decision and NBP post-meeting press conference – both later this afternoon.