Thursday’s inflation in Hungary surprised slightly on the upside with a rise from 3.7% to 4.1%, but there is a bigger surprise here compared to the forecast National Bank of Hungary (NBH) 3.8% year-on-year, notes Frantisek Taborsky, FX strategist at ING.
At least three more cuts this year
“Given the rally we have seen in the HUF rate market over the past few weeks, it is not that surprising that the market has started to reprice the current dovish expectations for rate cuts from the central bank. Still, the market is pricing in at least three cuts or even a bit more than that, with the possibility that we could see some movement this month.”
“That said, our economists say the inflation numbers do not strongly point to a rate cut in August and see room for only two more reductions this year. While we believe the market will remain on the dovish side of the market valuation, there is some room for profit-taking and upside appreciation. The HUF is thus getting a boost for gains after two weeks of depreciation.”
“Yesterday, we saw EUR/HUF already moving lower, and we expect more today below 396 and lower.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
