HUF: USDHUF Hits New Cycle Low, Extends This Week’s Sell-Off to Over 5%

USDHUF has hit a new cycle low, down 0.6% on the session amid ongoing greenback weakness. This week’s surge in EURUSD remains a key driver for CE3 currencies, with the single currency up an impressive 4.5% on the week.

• We noted earlier that regional geopolitics continue to be a major source of uncertainty for the zloty, and this is no different for the forint as well. A number of questions remain unanswered, particularly: (1) whether some form of ceasefire in Ukraine is probable in the coming weeks/months, (2) whether a potential truce could be converted into lasting peace, and (3) whether European NATO allies can maintain a credible deterrent against Russia in the light of changes in US policy.
• Meanwhile, domestic focus will turn to February CPI figures, due for release Tuesday next week. Last month’s data surprised against both market expectations and the central bank’s forecasts, prompting analysts to largely price out rate cuts through the remainder of the year. The NBH meet next on Mar 25 – in what will be the first meeting under the helm of Governor Mihaly Varga – with the new administration likely to retain a hawkish bias on monetary policy.