The EUR/HUF currency pair is expected to touch 315.00 by the end of this year. Inflation pressures are still weak around CEE as they are elsewhere in euro zone. This will likely keep MNB's language dovish for a while longer, which will exert mild upward pressure on EUR/HUF through the year, especially as the ECB announce tapering.
CPI inflation for March turned out to be softer than expected at headline level, with prices remaining flat month-on-month vs. market expectation of 0.3 percent rise. The year-on-year inflation rate fell to 2.7 percent y/y from 2.9 percent in February, undershooting expectations for a rise to 3.1 percent.
EUR/HUF traded higher at nearly 312.00 yesterday as the data supported MNB's ultra-dovish stance. It is worth noting that lower energy prices and base effect from tax changes impacted the data. However, MNB's underlying inflation measures continued to inch up as they had done in recent months
