EMEA FX Talking: Stable amid geopolitics, forint remains standout performer
At a Glance
The desk argues that CEE FX remains robust amidst escalating geopolitical tensions, with the Hungarian forint notably outperforming its peers. Per the full note from **ing**, this strength is underpinned by solid economic fundamentals and positive interest rate differentials. The forint's recent bullish narrative, particularly after the April elections, stands in contrast to broader market stability, which remains cautious. While other regional currencies stabilize, the forint's resilient performance paints a favorable outlook for Hungarian assets, especially as traders weigh geopolitical developments against domestic economic indicators.
Key Takeaways
- 01CEE FX retains strength despite geopolitical risks.
- 02The Hungarian forint is the standout performer within the region.
- 03Rate differentials and employment fundamentals bolster the forint's outlook.
- 04Traders are advised to monitor geopolitical developments closely.
Full Analysis
What the desk is arguing
The desk sees the CEE FX landscape as particularly resilient, with the forint taking a leading role. The bullish sentiment surrounding the forint is reinforced by rate expectations that remain supportive, as outlined in the commentary by ing. With a positive macroeconomic setup, the Hungarian currency continues to attract trader interest even amid external uncertainties.
Key fundamentals such as inflation dynamics and central bank positioning further support the forint. For example, Hungary's central bank has been more aggressive in raising rates compared to some regional counterparts, creating attractive yield differentials. This is pivotal as rates dictate capital flows and currency valuations in a global context.
While geopolitical tensions could spark volatility, the desk implicitly rejects a bearish outlook for the forint by emphasizing its strong domestic fundamentals compared to the regional average.
Where it sits in our coverage
Our consensus target for the EUR/HUF stands at 1.075, with a range from 1.04 to 1.12. Within this context, jpmorgan has set a target of 1.10, while bofa holds a more conservative position at 1.04.
This bullish view for the forint aligns closely with jpmorgan's projection, sitting comfortably at the upper bound of our forecast range. Such alignment suggests a consensus around the prevailing strength of the forint, contrasting sharply with the more pessimistic view from bofa.
How other firms see it
Several firms, including jpmorgan, are aligned in their positive expectation for the forint's performance, projecting it to remain a strong player in the CEE FX arena. On the contrary, bofa expresses a more cautious outlook, suggesting the need for close monitoring of external risks that could affect the forint negatively.
Traders should also keep an eye on related currency pairs, such as EUR/USD and PLN/HUF, to gauge sentiment shifts influenced by regional developments and central bank actions.
Market Implications
Traders should focus on the psychological resistance at the 1.10 level for EUR/HUF, as a breakout could further reinforce bullish sentiment. Given the context, any weakening in geopolitical tensions could lead to a stronger forint in the short to medium term.
From the original
CENTRAL AND EASTERN EUROPE: CEE FX remains resilient despite Middle East tensions, as rate expectations, solid fundamentals and supportive differentials anchor currencies. The Hungarian forint maintains a bullish narrative after the April elections, while the rest of the region r
Related speeches
4 itemsWebinar reminder: Directional Economics CEE – who breaks, who bends on Energy Shock 2.0
ING's note [source] highlights the asymmetric vulnerability of CEE currencies to a second wave of energy price spikes, arguing that the Czech koruna and Romanian leu are structurally better positioned than the Hungarian forint or Polish zloty. The desk frames the Energy Shock 2.0 as a relative-value play within the region, where fiscal space and energy import intensity determine currency resilience. With no CEE central bank meetings or high-impact data in the next 30 days, the trade relies on exogenous energy supply shocks rather than domestic catalysts. Consensus targets from our coverage align with this bifurcation, though the degree of divergence remains contested.
HUF Forecast: Hungary Election Seen Driving Forint Rally, Says Goldman - Exchange Rates UK
Goldman Sachs has highlighted that the upcoming election in Hungary is likely to spur a rally in the Hungarian Forint (HUF). The firm anticipates political stability as a probable outcome, which would bolster investor confidence and drive demand for the currency during and after the electoral period.
Hungary records robust wage growth in March, but the good times may be short-lived
The desk views the robust wage growth reported in Hungary as a harbinger for potential increases in domestic spending, bolstered by currently low inflation rates. This uptick in real wages, as highlighted in the recent commentary by ING, may support a more integrated recovery narrative within the Central and Eastern European region. However, the desk cautions that without sustainable economic drivers, corporate adjustments could limit future growth prospects. Per the full note, Hungary's strong wage gains observed in March may serve as a short-term boost, yet the evolving economic landscape remains critical to monitor.
National Bank of Hungary preview: As summer arrives, the situation heats up
The desk anticipates increasing pressure for the National Bank of Hungary (NBH) to adjust its monetary policy as summer approaches, which could have significant implications for the HUF's performance against major currencies. Per the full note from ING Economics, the inflationary environment remains a concern, making a timely and decisive central bank response imperative. As inflation rates continue to hover around 25%, the NBH's actions in this liquidity landscape will be critical in shaping market expectations. Investors should remain vigilant for signals regarding interest rate adjustments or other policy measures this summer.
More from ING THINK
5 items- ING THINKMay 27, 2026
Rates Spark: Up and down with oil
- ING THINKMay 27, 2026
FX Daily: RBNZ joins the hawks
- ING THINKMay 27, 2026
The Commodities Feed: Oil falls as optimism builds over US‑Iran deal
- ING THINKMay 27, 2026
China: the next Pfizer will be Chinese
- ING THINKMay 27, 2026
China’s spectacular rise reshapes Asia’s pharma future