25 Mar 2015
EUR/HUF might fall to 297/298 – KBC
FXStreet (Barcelona) - With NHB likely signalling a short easing cycle, the KBC Bank Research Team believes that HUF might strengthen more, expecting a break below 300 to lead EUR/HUF to bottom out of the strengthening at around 297/298.
Key Quotes
“The National Bank of Hungary cuts its base rate by 15 bps from 2.1% to 1.95%. The market consensus was a bit wider a 20bps cut, though the expectations were divided between 10bp and 20bp. Thus, the 15bps easing was a small surprise.”
“The HUF reacted on the decision with strengthening and the EUR/HUF pair moved close to 301.”
“We see relatively high chance for cuts in April and May, so the base rate might be moderated to 1.75% at the end of May.”
“We see strong resistance levels around 300 as there are many option barrier levels around these exchange rates. If the EUR/HUF breaks below the 300 (psycho) barrier, the bottom of the strengthening might be around 297/298.”
Key Quotes
“The National Bank of Hungary cuts its base rate by 15 bps from 2.1% to 1.95%. The market consensus was a bit wider a 20bps cut, though the expectations were divided between 10bp and 20bp. Thus, the 15bps easing was a small surprise.”
“The HUF reacted on the decision with strengthening and the EUR/HUF pair moved close to 301.”
“We see relatively high chance for cuts in April and May, so the base rate might be moderated to 1.75% at the end of May.”
“We see strong resistance levels around 300 as there are many option barrier levels around these exchange rates. If the EUR/HUF breaks below the 300 (psycho) barrier, the bottom of the strengthening might be around 297/298.”