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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
HUNGARY
- The NBH decided to leave its 1W depo rate (effective rate) unchanged at 6.15% despite recent HUF weakness.
- We have seen that the selling pressure on HUF has been rising this week following Orban’s victory over the weekend as market has been pricing in renewed political tensions with the EU in the near to medium term.
- EU Von Der Leyen confirmed this week that the Commission has triggered the rule of law conditionality mechanism against Hungarian government.
- The political divergence between Hungary and the EU has been delaying the EU pandemic funds; as a reminder, Hungary is due to receive 7.2bn EUR in grants under EU’s recovery funds, which is worth around 5% of the country’s GDP.
- Hence, even though the HUF is currently trading significantly below its ‘fundamental’ value, political uncertainty may weigh on the forint in the short term.
- EURHUF broke above the 380 level this morning and currently trade at its highest level since March 14. The pair is up nearly 15 figures this week, and the forint weakness keeps pressuring NBH policymakers as it supports inflation expectations.
- Key resistance to watch on the topside stands at 381.60, which corresponds to the 38.2% Fibo retracement of the 352.40 – 399.60 range.
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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