The forint has recovered substantially from the initial shock of the Russia-Ukraine conflict. EUR/HUF is set to hover around  370 in the near-term. Looking ahead, economist at Commerzbank do not anticipate further HUF strength.

EUR/HUF can calm down as conflict subsides

“Our EUR/HUF forecast of 370 for end-2022 remains unchanged, but the path has changed somewhat. Recently, the pair spiked sharply, to beyond 400, as the Russia-Ukraine conflict broke out. From those levels, we now expect a gradual calming, followed by sideways movement at 370.”

“We forecast forint volatility to remain high for now because the conflict has not gone away. What is more, the market is pricing in more monetary tightening by the Fed in coming quarters.”

“As geopolitical risk calms down in the medium-term and the energy and commodity price shock also passes its peak, we see limited recovery of the forint, taking EUR/HUF back towards 365 levels during 2023.”