The Hungarian Forint faces renewed pressure following Magyar Nemzeti Bank’s decision to cut its policy rate to 5.75 percent, with clear signals that additional easing lies ahead. Societe Generale strategists warn that the Forint’s recent rally against the Euro may have reached its limit, identifying a bottom near 348.59 for the EUR/HUF pair. The French bank anticipates further rate reductions will push Hungary’s terminal rate down to 5.0 percent by year-end, marking a significant shift in the central bank’s monetary stance.
This dovish pivot from the MNB comes as European emerging market currencies navigate complex inflation dynamics and diverging central bank policies across the region. Traders holding long Forint positions should reassess their exposure as the interest rate differential that previously supported HUF strength continues to narrow. The currency’s appreciation momentum appears exhausted under the weight of sustained monetary loosening.
FXnCO Insight
Forex traders should consider taking profits on long HUF positions and potentially reversing to short as rate cut expectations through year-end signal further EUR/HUF upside toward 360 levels.
Source: FXStreet