HUF: EURHUF Nears Weekly Highs and Key 50-Day EMA Resistance

EURHUF is nearing yesterday’s post-Orban presidency report highs, despite no new news on this front. The cross is 0.55% higher at typing, narrowing the gap to key resistance at 385.68, the 50-day EMA - a close above this average would be the first since June. A moderately firmer greenback and higher US yields may be pressuring CEE currencies at the margins, while ongoing pessimism regarding Russia-Ukraine peace is still a key driver.

• Our view is that the possibility of pushing through the reform to a more dominant presidential system could be politically damaging – and as the Bloomberg piece notes: “That path would be risky, though, if it was seen as going against the popular will.” Furthermore, Orban would need to use Fidesz’s current supermajority in parliament before April's election to push through the change.
• Regardless, should speculation of an Orban presidency continue to gain traction, the bias for a stronger HUF before the parliamentary elections could reverse. Given the NBH’s acute sensitivity to the strength of the currency, a significantly weaker HUF may prompt central bank officials to err on the side of caution and double down in its hawkish stance.