HUF: Forint Resilient to Poor Domestic Data, Attention Turns to US Payrolls

Positive momentum for equity markets continues to contribute to the more benign risk backdrop for emerging market currencies as focus turns to the US jobs report due this afternoon. For EURHUF, the cross traded as low as 392.04 this morning and despite a moderate bounce in recent trade, we remain 1% below Tuesday’s peak.

• The forint initially displayed resilience to weaker-than-expected retail sales and industrial production data released this morning, highlighting the slow pace that the recovery of the Hungarian economy is proceeding at. Meanwhile, the ongoing meeting between PM Orban and Russia’s Putin will no doubt add to the strain on Hungary-EU relations.
• Despite this week’s pullback, bullish conditions remain intact with the move lower considered corrective from a technical standpoint. A clear break of the 50-day EMA at 392.62 is required to undermine the bullish theme. Topside focus remains on 395.73, a retracement level, ahead of 399.75, the Mar 12 high and a key resistance.