Hungarian Forint: Recovery against Euro may resume – Commerzbank
Commerzbank’s Tatha Ghose notes that the Hungarian Forint (HUF) has only partially retraced its post-election gains and is expected to recover if global risk conditions stabilise, with EUR/HUF seen returning towards 350–355 in coming months.
The Hungarian Forint (HUF) has experienced a partial recovery following the recent election, according to Commerzbank’s Tatha Ghose. The analyst expects the HUF to return to the 350-355 range against the Euro (EUR) if global risk conditions stabilize. However, Ghose warns that slower growth, continued central bank easing, and fiscal concerns could lead to renewed pressure on the Forint into 2027, as real interest rate support diminishes.
The forint rally has corrected over the past month, but this correction should not be overhyped, as the currency has always been a high-beta risk play in Central and Eastern Europe (CEE). The recent move was largely due to a partial unwinding of a strong prior rally, rather than a reassessment of Hungary's political story. Factors such as energy shock, geopolitical risk, and drought have contributed to stagflation fears, making the forint more vulnerable than the zloty or koruna.
Despite the recent decline, the regime-change narrative surrounding Hungary has not disappointed, with Prime Minister Viktor Tisza's ratings remaining strong and the country pursuing reforms on multiple fronts. However, addressing the challenges of slower trend growth, implementing meaningful reforms, and managing fiscal policy will prove difficult in the long run.
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