The EUR/HUF cross rate continues its volatile path. Economists at ING expect the pair to see a gradual turn lower below 400 in 2023.

HUF to be moved by non-monetary events and shocks in the short run

“We believe the Hungarian Forint is more likely to be moved by non-monetary events and shocks in the short run. The government's conflict with the EU over the rule of law will remain a major issue at least until the end of this year. We expect a positive outcome on the rule of law issue and an unlocking of the potential of the Forint.” 

“As some form of positive outcome of this story seems to be priced in already, and also market positioning seems to have flipped to a slightly longer view in recent weeks, the EU story has become asymmetric for the HUF.” 

“Instead of a jump in Forint strength, we expect a gradual drift lower below 400 EUR/HUF next year. However, our strong conviction regarding a positive outcome for Hungary makes the Forint our currency of choice in the CEE4 space.”