Last week after business hours on Friday, Standard & Poor’s issued a downgrade of outlook on Hungary’s sovereign debt from stable to negative. S&P already rates the issuer at 'BBB-/A-3', the lowest within investment grade, which highlights the significance of a negative outlook from here.
EUR/HUF uptrend stalled near 416 and it has evolved within a sideways consolidation, Societe Générale’s FX analysts note.
The National Bank of Hungary is scheduled to meet today, but this should be a copy-and-paste of previous meetings. FX has seen significant relief in the last two weeks, but inflation did surprise to the upside in December.