Societe Generale strategists report that the Hungarian central bank, Magyar Nemzeti Bank (MNB), is widely expected to cut its base rate by 25 basis points to 5.50% today, marking the fourth such cut this year [1]. This expectation is supported by dovish minutes from the July meeting and a softer-than-expected July inflation reading of 1.2% year-over-year, which leaves room for further monetary easing [1]. Governor Varga previously indicated in June that at least two more rate cuts could be forthcoming [1].
The EUR/HUF currency pair has recently pulled back to around 362 after failing to break resistance near 368, with the first key support zone identified at 359/358 [1]. Societe Generale notes that a hawkish surprise from the MNB could push EUR/HUF back toward 360, while a break above the 200-day moving average near 371 would be required to signal a broader rebound in the pair [1]. The pair has staged a steady rebound since reaching an interim low around 348 in June but continues to face strong resistance near the late-April high of 368 [1].
Looking ahead, Societe Generale's emerging markets team projects Hungarian inflation at 1.5% in 2026 and 2.4% in 2027, with policy rates expected to ease to 5.00% by the end of 2026 and 4.00% by the end of 2027 [1]. The technical outlook suggests that while the EUR/HUF is forming a base, there are no clear signals yet of a significant upside move, and a break below the 359/358 support could trigger a resumption of the broader downtrend [1].
CONCLUSION
The Hungarian Forint remains resilient against the Euro as the central bank is expected to continue its rate-cutting cycle, supported by subdued inflation data. Market participants are watching key technical levels for EUR/HUF, with further easing likely if inflation remains soft. The outlook remains cautiously dovish, with no immediate signs of a major reversal in the currency pair.