News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Mixed
Oil - US Crude
Mixed
Wall Street
Bearish
Gold
Mixed
GBP/USD
Bullish
USD/JPY
Bearish
More View more
Real Time News
  • UK PM Johnson says virus restrictions likely to last 6-months $GBP
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/38gTDn8ejP https://t.co/CjCiVL0C9q
  • It’s important for traders to be familiar with FX spreads as they are the primary cost of trading currencies. Understand a pair's spread here: https://t.co/S9CEcBm5Qe https://t.co/0gQ60Dd1S5
  • Optimism $GBP https://t.co/UjSo3Dpthr
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.44%, while traders in NZD/USD are at opposite extremes with 70.05%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/n7ePyLk3EB
  • Heads Up:🇧🇷 BCB Copom Meeting Minutes due at 11:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-09-22
  • Commodities Update: As of 10:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 1.13% Gold: -0.34% Silver: -1.88% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/1fgVHj1F6Z
  • Forex Update: As of 10:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.12% 🇳🇿NZD: 0.01% 🇨🇦CAD: -0.03% 🇨🇭CHF: -0.17% 🇬🇧GBP: -0.19% 🇪🇺EUR: -0.28% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/2CA80kFhl2
  • Coming up at half past the hour. Do join me if you can, using the link below https://t.co/RAiCJNLuSC
  • Indices Update: As of 10:00, these are your best and worst performers based on the London trading schedule: Germany 30: 1.18% FTSE 100: 0.49% France 40: 0.40% US 500: 0.22% Wall Street: -0.03% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/Jb7LZOruhP
HNB Maintains Rate on Symmetrical Inflation Risk: EURHUF Sells Off

HNB Maintains Rate on Symmetrical Inflation Risk: EURHUF Sells Off

2014-10-08 15:45:00
Jeremy Wagner, CEWA-M, Kara Dailey,
Share:

Talking Points:

  • Domestic Demand Recovers as Unemployment Falls 0.3%
  • External Demand Weak While Investment is Uncertain
  • USD/HUF Range Bound, EUR/HUF Likely to Reach Lower Prices Based on Equal Wave Pattern

Minutes from the September 23 Monetary Council Meeting were released today, providing additional insight into the council’s decision to hold rates steady at 2.1%. Based on the assessment of current domestic factors, financial market variance, and international risks the Central Bank of Hungary maintains the stance that medium term target inflation can be achieved under the continuation of the current 2.1% interest rate.

Domestically, demand has recovered in line with the additional output produced and reduction in unemployment from 7.9 to 7.6 percent. Furthermore, the easing of credit restrictions combined with an increase in real income (resulting from low inflation) has also resulted in an increase in consumption. However, despite this gradual internal recovery, expected inflation is projected to remain around zero for the remainder of the year due to low energy prices and an awareness of persistently low inflation in external markets.

Growing geopolitical risks abroad have left investors uncertain and sentiment volatile. While long term yields have maintained quarter one levels, conflict in Eastern Europe, further European Central Bank rate cuts, and the likely but not definitive 2015 timing of U.S. Fed rate increase has left the MPC uncertain about the direction and magnitude of future investment.

Furthermore, global demand is slightly weaker due to sanctions in Eastern Europe and slow growth in the Eurozone. If sanctions and low inflation externally continue to inhibit trade and economic growth beyond the estimated -0.2%, MPC members acknowledge that under this variant scenario a loosening of monetary policy may be required.

Alternatively, if economic growth is more robust and inflation rises faster than estimated in the baseline scenario, the MPC acknowledges that a tighter monetary policy may be needed to keep inflation on the path to the medium term target. Sooner than expected rate increases, by advanced central banks may also require a tightening of monetary policy.

With the current disinflationary impact expected to deteriorate and symmetrical inflation risks, the USD/HUF continues to be stuck inside its 240-250 range, with little evidence suggesting a break anytime soon. However, the FOMC minutes later today could be a catalyst if there are any surprises.

From a technical perspective in the EUR/HUF, prices sold off to our initial target of 307 after the rate announcement. There is enough support through price action and wave relationships for a bounce to develop up towards 313.

However, the tan box is an equal wave pattern where the length of wave ‘c’ equals the length of wave ‘a’. When this pattern emerges, many times prices will fully retrace to the origination of the pattern. In this case, the beginning of the pattern is at 301.50. Trend line support (black line) is also near this same level. Therefore, on a successful break below 306, target 301.50.

It is difficult to say which scenario would play out in the short run. Longer term, the equal wave pattern suggests lower prices eventually.

EUR/HUF Daily Chart

dailyfx eur/huf daily chart.

Chart Created By Jeremy Wagner Using MarketScope2.0

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES