Hungarian forint has hit the weakest levels since the beginning of March. For now, the EUR/HUF has settled in the 390-395 range. Economists at ING note that the pair could reach its highest level in history if the central bank does not hike rates next week.

Hidden potential for the forint in the second half of the year

“With FX weakening, markets are raising bets on an emergency rate hike next week. However, this is far from certain. Thus, market disappointment may lead to further forint weakening to the 400 level, which would be the weakest in history.”

“It is necessary to keep in mind that the market has already priced in a lot of negative news. Thus, we are negative on the forint in the short-term, but we continue to monitor headlines that should unlock the hidden potential of the forint in the second half of the year.”