EUR/HUF to move back above 380 – ING

EUR/HUF dropped below 380 on Friday. Economists at ING analyze the pair’s outlook.

Forint has significantly detached from the rate trajectory

The market is still pricing in more rate cuts from the National Bank of Hungary (NBH) and we see the HUF as having significantly detached from the rate trajectory since the last central bank meeting, which in turn indicates a weaker HUF. We see this as unsustainable for the longer term. 

We expect more of a retracement of recent gains and a move back above 380 EUR/HUF.