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Weakness in HUF and Equities Persists Ahead of NBH Meeting on Tuesday (Sep 21)

HUNGARY
  • The HUF keeps weakening against major crosses ahead of NBH policy meeting next week (Sep 21).
  • USDHUF has been trending higher in the past two days, breaking above its 200DMA (297.60) and 50DMA (299.50) and currently testing its 300 resistance. A break above that level would open the door for a move up to 303.70.
  • Sell-side is split between 15bps and 30bps hike for the September 21 meeting as inflationary pressures remain firm in the CEE region (CPI inflation accelerated to 4.9% YoY in August) but the uncertainty over the economic recovery remains high.
  • The HUF weakness has also been weighing on Hungarian equities in the past few days, with the BUX index consolidating from an all-time high of 51,121 to 52,082.

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