Societe Generale analysts report that the EUR/HUF currency pair is consolidating above the 360 area, following an interim low near 348 in June. The pair has rebounded but remains capped by the 200-day moving average at 370/371, with a breakout above this level needed to confirm a larger upward move. Conversely, a break below the recent pivot low at 359 could signal a risk of a deeper decline in the cross [1].
In the context of Central and Eastern Europe, Middle East, and Africa (CEEMEA), Societe Generale expects the Hungarian National Bank (MNB) to keep the policy rate unchanged at 5.50% today, after three consecutive 25 basis point cuts. The analysts note that higher energy prices, a stronger US dollar, and tightening by the Federal Reserve and European Central Bank have increased financial pressures and reduced Hungary's policy flexibility [1].
A potentially significant development is the possibility of the MNB reducing its inflation target from 3.0% to 2.5%, which would underscore Hungary's longer-term commitment to Eurozone convergence. Societe Generale's base case anticipates policy easing to resume in December, continuing gradually through 2027, with the policy rate expected to fall to 4.50% next year [1].
Overall, the EUR/HUF is consolidating above the 360 area, with key technical and policy factors influencing the outlook. The market is closely watching for a breakout above the 200-day moving average or a breach of the 359 support, as well as any changes in the MNB's inflation target and future rate decisions [1].
CONCLUSION
The Hungarian Forint is consolidating against the Euro, with technical levels and central bank policy decisions shaping the outlook. Societe Generale expects the MNB to hold rates steady for now, with gradual easing likely to resume later this year. Market participants are monitoring both the EUR/HUF technical thresholds and potential shifts in Hungary's inflation target for further direction.