The current market bias for the EUR to HUF exchange rate is range-bound, as it has stabilized around 384.4, just below its three-month average.
Key drivers for this range include:
- The interest rate differential is narrowing as Hungary's National Bank maintains a disciplined monetary policy while inflation pressures may delay any interest rate cuts.
- Recent economic projections show positive growth in the Eurozone, with GDP expected to increase by 1.6% in 2026, enhancing the euro's stability.
- Bulgaria's upcoming euro adoption can strengthen regional economic integration, supporting the euro's value.
In the near term, the exchange rate is expected to remain within a stable range as both currencies respond to their respective economic indicators.
Potential upside risks include a significant drop in U.S. interest rates, which may weaken the dollar and strengthen the euro. Conversely, unexpected geopolitical tensions could hurt the euro, impacting its demand in the market.