The current market bias for the EUR to HUF exchange rate is range-bound.
Key drivers include the interest rate policies of the European Central Bank (ECB) and the Hungarian National Bank (MNB). The ECB has opted for a cautious stance, warning that a stronger euro could affect inflation negatively. Meanwhile, the MNB has maintained a disciplined monetary policy, contributing to recent strength in the HUF. Additionally, inflation trends influence currency dynamics, as Hungary's inflation remains a focus, with core inflation slightly above acceptable levels.
In the near term, the EUR to HUF is expected to trade within a stable range, reflecting its movement over the past few months.
Upside risks could arise from improved economic data from the Eurozone, which may strengthen the euro. Conversely, downside risks are linked to ongoing fiscal pressures and negative economic outlooks for Hungary, which could weigh on the HUF.
