EUR/HUF: Risk of another push higher – Rabobank

The National Bank of Hungary will announce its policy decision at 12:00 GMT. Economists at Rabobank expect the EUR/HUF pair to push higher.

Key quotes

“While key interest rates are likely to remain unchanged at the record low, the NBH will reveal details regarding its asset purchasing programme, which will be a critical element of the rescue package announced by the government.”

“We do not anticipate a proper retracement in EUR/HUF until the second half of the year as at this stage there is simply too much uncertainty.”  

“We see the risk of a yet another push higher in EUR/HUF towards the April 1 high at 369.54 as the upcoming data and how people behave when various restrictions are lifted may force the market to revise its optimistic view of a rapid economic recovery from the crisis.”

“The long-term outlook for the forint will depend on how efficiently the Orban administration will be able to use potentially substantial funds generated by issuing bonds purchased by the NBH. If PM Orban uses the crisis and the rescue package to consolidate his power, the forint will continue to underperform its peers.”