The Hungarian forint keeps moving in a tight range within the 250 zone and it seem that nothing can currently push the unit outside its favoured area. Friday’s session was just another confirmation of this trading scenario. The EUR/HUF pair opened and closed at the 250.40 level, while the intra-day volatility way minimal. Although today is the domestic eco calendar empty, this week should be richer on domestic events starting with tomorrow’s release of the December inflation. Although we do not differ from the market consensus there may be some pre-positioning ahead this release on the domestic bond market, which might be on a lower-than-expected inflation. This could eventually help the forint, but we remain skeptical that EUR/HUF will much deviate from the 250.0 level. Another source of market volatility could be the Polish zloty, but even in this case we think that the conclusion from the previous sentence holds.
(CSOB - Investment research)