EUR/HUF seen to lose its rallying trend on profit-booking, Fed policy effect subsides

The Hungarian forint is expected to lose its rallying steam against the euro, following profit-booking at the start of the week Monday amid washing off the effect of the Federal Reserve’s monetary policy decision to keep interest rate unchanged.

The forint consolidated its gains around the EUR/HUF at 306 level, given that the recent rally was triggered first by an unexpected sovereign rating upgrade of Hungary and secondly by Fed’s decision to leave official rates unchanged.

From the technical point of view, EUR/HUF seems to assume its first support level at 305.  If the latter is broken, the next stop will be a psychological barrier at EUR/HUF 300, KBC reported.

The forint eased 0.2 percent to the euro, pulling back from 16-month highs amid some unease caused by a blast over the weekend in Budapest, while Hungarian stocks fell 0.7 percent to one-week lows.

Meanwhile, a meeting of the OPEC is scheduled to be held in Algiers later in the day, where oil-producing countries will discuss a possible output-limiting deal.