HUF: EURHUF Extends This Week’s Advance to Over 1% as Tariff Deadlines Loom

EURHUF has advanced close to 1.5% this week as Trump’s tariff deadlines loom. The cross has traded higher for five consecutive sessions, during which time it has risen above both the 20- and 50-day EMAs - the latter of which is a firm resistance level that we have not closed above since January. The proposed 25% levy on auto imports into the US would weigh on Hungarian growth given the nation’s acute sensitivity to the German economy – Germany accounted for 10.2% of US vehicle imports in 2024.

• In its latest Inflation Report, the NBH noted that "As Hungary is a small open economy, price (tariffs) and non-price barriers to international trade have a significant impact on the growth trajectory”. However, it said that at the same time, “the moderate substitutability of products and regional reorganisation of production chains may cushion the impact of tariff increases in the medium term."
• In JP Morgan’s view, the perception of a large CEE exposure to the US market is overstated. Not only are net exposures small (including indirect channels), but even a 25% tariff is unlikely to result in the total elimination of US consumer purchases of cars, and some of that production could be funnelled to other markets, so the effective impact could be even smaller, they say.
• Meanwhile, capping food prices and cutting income tax for mothers may risk propelling inflation into double figures, a former NBH researcher told MNI. See here.