Following a multi-week rally in EUR/HUF, economists at Credit Suisse see scope for a drop towards 380 if the central bank hikes the one-week depo rate by 50bps or more, while EUR/HUF could rally towards 410 if the bank under delivers.

Two-way risk to EUR/HUF ahead of the one-week depo auction 

“A rate increase of less than 30bps will probably pave the way for a rally in EUR/HUF above the 400 mark and towards the 410 area.”

“A sizable increase in the one-week depo (e.g. 50bps or more) will probably be enough to revive the notion that the central bank is determined to tackle inflation. In this case, a drop in EUR/HUF all the way to the 380 within a span of a few days looks feasible.