Post-NBH Advance for Forint Proves Short-Lived

The Forint has reversed the brief NBH-inspired gains and EURHUF now sits just moderately lower on the day, in line with the broader stability across G10 currency markets on Tuesday. Despite the pressure on global equity indices, HUF sits mixed among its regional peers (PLNHUF: +0.10%; CZKHUF: -0.18%).

• In his post-decision briefing, Deputy Governor Virag struck a hawkish tone, saying Hungary needs “tight” monetary policy and must be “cautious” with further rate cuts as inflation remains “unacceptably high”. The forint initially rallied on the remarks, but EURHUF has since returned to above pre-comment levels around the 391 mark.
• Looking ahead there are no more notable domestic releases on the docket for the remainder of the week. Attention will turn to Eurozone CPI prints given HUF sensitivity to US and ECB rate paths as well as global risk developments.