Yesterday's National Bank of Hungary meeting broughtno changein rates to 6.50% as expected. The central bank accompanied this with hawkish comments but tried to avoid commenting on rate hikes that circulated in the Q&A session, ING’s FX Frantisek Taborsky notes. Market can benefit from an increase in the rate differential “The NBH seems to have done as much as possible while avoiding extreme scenarios in the current environment.
We see HUF as the most exposed currency within the CEE region in case of a Trump victory, while relief in case of a Harris victory would be more visible in PLN and CZK. NBH will thus face a challenging following weeks. Overall, HUF may have found some new range, but it is not out of the woods yet and the coming weeks do not suggest calming. HUF recovery will thus take more time and will mainly depend on the global story.