The EUR to HUF exchange rate has recently been influenced by several crucial developments. Analysts have noted that the euro (EUR) is benefitting from a weaker US dollar (USD), contrasting with a downward revision of the Eurozone’s manufacturing PMI. Additionally, expectations surrounding the European Central Bank (ECB) are shaping market sentiments. If the upcoming consumer price index affirms recent inflation increases, it could strengthen the euro further, suggesting the ECB's rate-cutting cycle may be at an end.
Current forecasts indicate that the ECB has shifted towards a more dovish monetary policy after raising interest rates to 4.0% in 2024. With expectations of a rate decline to about 3.5% by late 2025, the interest rate gap with the United States could compress, potentially exerting downward pressure on the euro. Nonetheless, the recent approval for Bulgaria to join the eurozone in 2026 is viewed positively, as it may enhance the euro’s influence and contribute to its long-term strength.
In contrast, the Hungarian forint (HUF) has shown resilience. It recently appreciated to an 18-month high against the euro, trading at 385 HUF per EUR, attributed to Hungary’s interest rate stability at 6.5%, which is currently the highest in the EU, and improving inflation expectations. Prime Minister Viktor Orban’s stance against adopting the euro amid concerns about the EU's integration may add complexity to the forint's future performance.
Currently, the EUR/HUF exchange rate has hit a 90-day low near 380.8, which is 1.9% below its three-month average of 388.2, demonstrating a period of stability within a narrow range of 380.8 to 395.4. Analysts indicate that this stable performance could be impacted significantly by fluctuations in global oil prices. With oil (OIL) currently trading at $63.33, down 2.4% from its three-month average, any significant changes in energy prices may also reverberate through the EUR/HUF exchange rate.
Overall, the trajectory for the euro against the forint will largely depend on the interplay of ECB monetary policies, inflation levels in both regions, and the broader geopolitical landscape affecting investor sentiment.
