HUF: Forint Trading at New 3-Month High Despite Disappointing Economic Data

The Hungarian forint has recovered well after this morning’s disappointing set of economic activity data pressured the currency. EURHUF is around 0.65% lower compared to this morning’s high, and is nearing 403.86, the Nov 7 ‘24 low. USDHUF, meanwhile, is now an impressive ~2.5% below Monday’s high, with the sharp pullback reinstating a bearish threat. 387.56, the Jan 24 low, marks initial support for the pair.

• Looking ahead to next week, CPI data due Tuesday provides the key domestic risk event. The NBH noted last month that “the temporary rise in inflation is expected to continue in January 2025,” which would justify another ‘hold’ decision at the Feb 25 MPC meeting. Greater uncertainty clouds the MPC meetings following the change of leadership in March, with sell-side generally lacking clear consensus over the start point for a resumption of easing, and a minority of analysts even expecting no change to rates for the remainder of the year.