HUF: USDHUF Extends Pullback From Monday’s High to ~2%

Ongoing and broad-based dollar weakness has resulted in an extension lower for USDHUF, which is now back at the week’s lows following a test of resistance at the 50-day EMA earlier in the week. However, the move appears to be entirely greenback-driven, with HUF strength not being reflected across other crosses – EURHUF trades moderately in the green while HUFJPY has fallen ~0.7% after hitting a 1-month high earlier in the session.

• Yields on HGBs have risen 3-7bps across the curve today, with the 10-year extending the recent move higher and now 18bps above the April low. On the other hand, the move higher for the Budapest Stock Index suggests appetite for Hungarian assets remains solid, with the index currently trading at a fresh record amid relative stability across the global benchmarks.
• EURHUF price action has been more contained this month, with the cross respecting a relatively narrow range following the late-April pullback. From a technical perspective, this move lower has undermined the bullish theme but is still considered corrective, with support seen further out at 399.03, the Apr 2 low. Meanwhile, short-term resistance has been defined at 406.27, a trendline drawn from the Apr 15 high.