Hungary’s National Bank will meet for its monthly rate decision today. A no change in base rate should support the Forint and drag EUR/HUF down to 390, economists at ING report.

Hungary's central bank tests market sensitivity on an upcoming rate cut

“The market is seeing signs of speculation of a too-early interest rate cut. If the NBH resists the temptation and confirms the hawkish tone, we expect the current speculation to cool down and the Forint could get back on track.”

“Yesterday's reaction to Fitch's downgrade of the rating outlook to negative could slightly clear long positioning and clear the way for further Forint appreciation. In that case, we expect that the Forint could test 390 EUR/HUF soon. Otherwise, the current positioning favours a rather asymmetric reaction negatively towards EUR/HUF 400.”