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HUF Remains Extremely ‘Cheap’ In Current Environment

  • EURHUF has been retracing lower in the past two days after finding a local high at 405 on Monday; the pair is currently testing its ST support at 402.35 (50DMA).
  • Next key level to watch on the downside stands at 400.
  • The surge in risk aversion in the past month has been weighing on the forint, which continues to trade at historically low levels despite the aggressive tightening cycle run by the NBH.
  • The chart shows that the broad HUF index (NEER) has been constantly diverging from its LT mean, currently trading 30% below its LT average.
  • This morning, economic data showed that the industrial production came in higher than expected, rising by 6.6% YoY in July (vs. 2.9% exp.), up from 4.8% the previous month.

Source: Bloomberg/MNI

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