HUF: Sideways trading then gradual weakening – Commerzbank

Commerzbank’s Tatha Ghose expects EUR/HUF to trade broadly sideways around 375 in coming months as the Euro appreciates, before the pair gradually rises toward 400 by end-2026, implying a weaker Forint. The report highlights improving central bank credibility, lingering inflation and policy asymmetry risks, and significant political uncertainty around Hungary’s April 2026 elections.

Forint strength seen fading after 2026 peak

"We forecast EUR-HUF to trade sideways in the 375 region while the euro appreciates in coming months but gradually rise (meaning weaker forint) after the euro has reached its peak in 2026."

"That said, the central bank did appear to pivot towards the dovish last December, which triggered a noticeable sell-off in the forint. But the sell-off has now reversed because MNB pivoted back towards hawkish in January following one adverse CPI print. This episode, in fact, further highlighted the MPC's professional, data-driven approach, and has further enhanced its credibility."

"Going forward, there are several risks for the currency."

"First, Hungarian inflation is at risk of staying above that of CE3 peers through 2026 and possibly 2027 – Hungary’s core inflation is currently the highest among CE3 peers and shows no sign of improving – this increases exchange rate risks."

"We assume that in our base-case there will be no major FX rally following the elections. But of course, we acknowledge that this can happen, as it happened in Poland. But even if it did, the path forward will not be smooth sailing for the new government. We see EUR-HUF reaching 400.0 levels by the end of 2026."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)