HUF
A further surge in the euro on the back of Trump’s latest comments, in which he noted that he would rather not use further tariffs against China, as well as the strong German PMI numbers have both provided fresh tailwinds for the Hungarian forint.
- Global risk sentiment remains the key driver for the HUF despite the impending NBH rate decision given that a ‘hold’ decision is widely anticipated at next week's meeting. Indeed, HUF FRAs are little changed on the year and indicate no change in policy over the next 3 months.
- More positive risk sentiment has contributed to the 1.75% pullback in EURHUF from this year’s earlier cycle highs. Earlier this week, the cross closed below the 50-day EMA for the first time since September and we remain below that average again today. The break bolsters an emerging bearish theme and signals scope for a move lower towards 405.52, the Nov 15 low.
- Meanwhile, USDHUF is 0.9% lower on the session with today’s losses exacerbated by both greenback underperformance and the break of support at the 50-day EMA. The pair is trading near the 390.00 level at typing and is an impressive 4% lower compared to the January highs.
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