The EUR/HUF market is currently range-bound, reflecting a stable exchange rate with limited volatility.
Key drivers include:
- The interest rate differential where the Hungarian National Bank's disciplined policy supports the Forint's strength.
- Geopolitical factors such as the ongoing war in Ukraine continue to impact the euro's valuation negatively.
- Higher projections for Eurozone GDP growth amidst ECB concerns over a strong euro affecting inflation adds complexity to the euro's trajectory.
In the near term, the EUR/HUF is expected to trade within a stable range, hovering close to recent lows.
An upside risk for the euro could arise from improved economic data from Germany boosting buyer confidence, while a downside risk includes potential disruptions stemming from political uncertainty in Hungary or further geopolitical tensions affecting the eurozone.