The National Bank of Hungary has a meeting scheduled for today, says Frantisek Taborsky, FX strategist at ING.
It is too early to break above 400 in EUR/HUF
“We expect a 25bp rate cut to 6.50% in line with market expectations. Even before the latest Fed decision, we were leaning towards a 25bp cut at the September NBH meeting. Post-Fed, we see a non-negligible chance of a slight dovish shift in forward guidance, with the 6.00-6.25% range cited as a realistic target for the 2024 terminal rate.”
“The NBH will publish its latest set of macroeconomic projections for the main measures (GDP and inflation) alongside the interest rate decision, while the detailed Inflation Report for September will be published on 26 September. Given the downside surprise in second quarter GDP growth and the weaker than expected start to the third quarter, we expect a significant downward revision to the GDP forecast.”
“Almost since the beginning of this year we have been using the 390-400 trading range frame for EUR/HUF, which has worked very well. In recent months, the space has probably narrowed to 392-400. While we see a move towards the upper limit of the range, we believe it is too early to break above 400. One reason is a higher EUR/USD, which will cushion the pressure on the HUF, but also a possible hawkish reversal from the NBH if the HUF comes under pressure.”
Source: Fx Street
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