HUF Strength Notable Amid EUR Fade

Despite EUR/USD erasing the post-Fed gains ahead of the ECB decision, HUF is trading on a firmer footing and now sits only 0.3% weaker against the euro on the week overall.

• Initial resistance at 375.48 – the 20-day EMA – was pierced this morning but the cross now looks for a clear break through yesterday’s lows. Further out, attention is on the bear trigger at 369.47, the Apr 18 low. Clearance of this level would resume the primary downtrend and open 366.41, the Mar 30 2022 low.
• USDHUF continues to trade near 1-year lows, with Monday’s low of 336.59 the support level to watch. HUFPLN trades nearly half-a-percent in the green and above the 20-day EMA.
• Similar optimism is not being reflected in local equities given global concerns around US regional banks. The Budapest Stock Index trades 0.66% lower and underperforms versus its CE3 peers. The local yield curve sits lower and flatter. Notably, yields across the curve are approaching their lowest levels since February.
• There is little in the way of domestic news/data driving price action today with focus turning to the ECB rate decision and Lagarde's accompanying presser this afternoon. A hawkish leaning decision could threaten HUF and its carry though expectations of a 25bps hike are firm.