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HUF: USDHUF Back Below 50-Day EMA as Forint Extends Recovery

HUF
CEEMEAEM BulletBulletEmerging Market NewsHungary

The Hungarian forint has extended its recovery from Monday’s lows, with the currency nearing the January highs and its highest level against the euro since November. Given the outsized weakness for the likes of HUF and CZK to dollar strength earlier in the week, it is unsurprising that the forint has stood to benefit more significantly from the reversal lower for the greenback, underlining the HUF’s particular sensitivity to global risk sentiment.

  • Indeed, USDHUF is around 2.6% lower compared to Monday’s highs - slightly outpacing the decline of the DXY index - and is trading below Friday’s closing levels. The pair is also back below the 20- and 50-day EMAs, reinstating a bearish threat and keeping focus on 387.56, the Jan 24 low.
  • Given firm expectations over the path of NBH policy in the coming months (i.e., no change to the base rate until after March at the very earliest), Hungarian rates markets have largely looked through this week’s growing trade risk. 3x6 FRAs continue to indicate no change to the base rate over the next 3 months, while longer-dated contracts have seen a slight dovish repricing. Among sell-side, views remain mixed over the exact timing of when monetary authorities will resume policy easing.
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The Hungarian forint has extended its recovery from Monday’s lows, with the currency nearing the January highs and its highest level against the euro since November. Given the outsized weakness for the likes of HUF and CZK to dollar strength earlier in the week, it is unsurprising that the forint has stood to benefit more significantly from the reversal lower for the greenback, underlining the HUF’s particular sensitivity to global risk sentiment.

  • Indeed, USDHUF is around 2.6% lower compared to Monday’s highs - slightly outpacing the decline of the DXY index - and is trading below Friday’s closing levels. The pair is also back below the 20- and 50-day EMAs, reinstating a bearish threat and keeping focus on 387.56, the Jan 24 low.
  • Given firm expectations over the path of NBH policy in the coming months (i.e., no change to the base rate until after March at the very earliest), Hungarian rates markets have largely looked through this week’s growing trade risk. 3x6 FRAs continue to indicate no change to the base rate over the next 3 months, while longer-dated contracts have seen a slight dovish repricing. Among sell-side, views remain mixed over the exact timing of when monetary authorities will resume policy easing.