The desk posits that Hungary's ongoing journey towards euro adoption presents significant appreciation potential for the Hungarian forint against the euro. Per the full note, the upcoming fiscal plan presentation in October is likely to reinforce criteria important for EU membership, potentially driving the EUR/HUF back towards 350. As geopolitical tensions ease and energy prices decline, conditions appear favorable for regional currencies, including the forint, to strengthen amidst an overall stable CEE currency environment.
What the desk is arguing
The desk emphasizes that current weakness in the Hungarian forint (HUF) is temporary, driven primarily by market sentiment rather than fundamentals. The expectation is that Hungary will clarify its fiscal strategy in October, directly addressing Maastricht criteria, which could propel EUR/HUF rates down to 350. Current sentiment is buoyed as lower energy prices alongside a weaker dollar can also provide support for the region's currencies.
Recent trends underline the HUF hovering around the higher end of its post-election spectrum, indicating that a consolidation of its current position could occur. The forecast suggests a modest bearish outlook for the short term (363.07 currently), with an anticipation of appreciation to 360.00, and eventually down to 347.00 over the 6 to 12-month horizon, contingent upon favorable regional developments.
Where it sits in our coverage
Our consensus target for the EUR/HUF currently aligns with the analysis from various firms, with a range of 347.00 to 363.00 for the end of the year. Notably, specific targets include: - Goldman: Dec-26 362.00 - Investec: Dec-26 370.00 - Commerzbank: Dec-26 360.00
The desk's viewpoint reflects a generally bearish short-term sentiment, but it looks to position itself towards the lower bound, advocating for a shift as market sentiment normalizes.
How other firms see it
Many aligned firms, including MorganStanley and RBC, echo a consensus with bullish outlooks for the HUF, given the anticipated alignment of fiscal policies with EU standards. However, contrary views from BofA suggest a more cautious approach, with targets reflecting skepticism on the forint's capacity to gain without substantial reforms in place.
The dynamics of the EUR/USD trajectory and the policy decisions from the European Central Bank (ECB) will be closely monitored as they will significantly impact the HUF's movement. Particularly, market sentiment surrounding the ECB's rate path will be crucial in assessing the euro's strength against other currencies, including the HUF.
01Hungary's fiscal plan may drive EUR/HUF towards 350 by October.
02Lower energy prices and a weaker dollar support the forint's strength.
03Current EUR/HUF levels reflect temporary weakness rather than structural issues.
04Regional stability and EU integration efforts are key to forint appreciation.
Market implications
Traders should watch for positioning around the 363.00 mark; sustained declines are expected near the 360.00 level if the anticipated fiscal clarity materializes. Additionally, keep an eye on upcoming geopolitical developments, as they can impact trader sentiment significantly.
Risks to this view
Risks to this bullish view include any adverse reactions stemming from the October fiscal announcement, as well as potential geopolitical tensions re-escalating, which could hamper the forint's recovery trajectory.
Articles EMEA FX Talking: Locked onto Hungary’s euro story Published 12:10 FX Czech Republic Hungary Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download CEE currencies have been reasonably stable, but we see enduring appreciation for Hungary's euro story. Here, the government presents its medium-term fiscal plan in October, with presumably plenty of references to the Maastricht criteria. This should send EUR/HUF back to 350.
And a weaker dollar and lower energy prices will be good for the region's FX Rafal Benecki , Peter Virovacz , David Havrlant , Mateusz Sutowicz , Dmitry Dolgin and Chris Turner We see the relative weakness of the Hungarian forint as temporary EUR/PLN: Zloty is back on the strengthening path Spot One month bias 1M 3M 6M 12M EUR/PLN 4.2991 Neutral 4.29 4.28 4.29 4.28 As financial markets again turned more optimistic about the Middle East situation, the EUR/PLN dropped towards the 4.30 level. Zloty strengthened because several MPC members also distanced themselves from the NBP governor’s latest comments about possible interest rate cuts after the summer. We still see the Polish currency as largely vulnerable to global market sentiment.
Stabilisation of the US–Iran conflict should create a positive environment for a slightly stronger zloty. However, the publication of the draft state budget for next year could temporarily limit the appreciation potential of PLN. Our mid-term view on the zloty remains unchanged.
Expect a limited rise of the EUR/USD in 2H26, GDP outperformance among regional peers and large inflows of EU funds justify a slightly lower level of the EUR/PLN exchange rate. Source: Refinitiv, ING Forecasts "> Source: Refinitiv, ING Forecasts EUR/HUF: We see the relative weakness of the HUF as temporary Spot One month bias 1M 3M 6M 12M EUR/HUF 363.07 Mildly Bearish 360.00 355.00 347.00 362.00 EUR/HUF is hovering around the top end of its post-election range. As well as the usual 'soft summer' phenomenon, the energy crisis is also a factor.
However, we think that, if necessary, the NBH will intervene again by providing its FX reserves to cover transactions relating to energy imports. Looking beyond the geopolitical rollercoaster, inflationary developments could pave the way for further monetary policy easing in autumn. A year-end base rate of 4.75–5.00% would still provide a substantial real interest rate, with price pressure below 3%, limiting the sell-side pressure on the forint.
The government will submit a medium-term fiscal framework at the end of October, which outlines its path towards meeting the criteria for adopting the euro. We believe this will provide significant support for the forint over a six-month horizon. Source: Refinitiv, ING Forecasts "> Source: Refinitiv, ING Forecasts EUR/CZK: Koruna weathers the storm Spot One month bias 1M 3M 6M 12M EUR/CZK 24.18 Neutral 24.20 24.15 24.10 24.05 The koruna has proven its stability amid global turmoil, and we believe this will be the case even in the upcoming months, seeing a broadly stable EUR/CZK rate in the near-term.
The continued Hormuz conflict is set to take its toll on economic performance, yet the Czech industry will somewhat benefit from the continued diversification of its client base on a global scale. With the relatively sound Czech fiscal stance, and positive interest rate differential over the euro in both nominal and real terms, the koruna should weather the current uncertainty and resume its strengthening trend once conditions improve. Source: Refinitiv, ING Forecasts "> Source: Refinitiv, ING Forecasts EUR/RON: FX stability is unlikely to go away soon Spot One month bias 1M 3M 6M 12M EUR/RON 5.2483 Neutral 5.25 5.25 5.25 5.30 EUR/RON has been trading mostly sideways in the last month, with the pair continuing to remain in the 5.24-5.26 range.
While the uncertain political situation, some rating fears and upside inflationary risks remain in the picture, the improvements on the fiscal front are noticeable. The budget deficit stood at 2.0% in the first half of 2026 (3.65% in 1H25), adding to the prospects of a better-than-target result in 2026 too. We expect the liquidity surplus to carry on due to large EU funds inflows, but at rather balanced levels that would facilitate less aggressive interventions in the case of large outflows.
Reform continuity and a successful final push on the last RRF absorption mile remain key. We expect the pair to remain within its current range and close the year near 5.25. Source: Refinitiv, ING Forecasts "> Source: Refinitiv, ING Forecasts EUR/RSD: RSD likely to remain stable on a firm NBS grip Spot One month bias 1M 3M 6M 12M EUR/RSD 117.36 Neutral 117.30 117.30 117.30 117.30 EUR/RSD moves have remained rather contained.
The pair have sat mostly between the 117.30 – 117.50 range. The sale of the NIS refinery to MOL Group is still in advanced stages, with parties aiming to close the deal this summer. US sanctions waivers have been renewed until 28 August.
In the background, the positive fundamentals backed by strong investments are still in the picture, even though record-low Danube levels add some headwinds now. At its July meeting, the National Bank of Serbia kept the key rate in place at 5.75%, despite a less cloudy inflation outlook, as global uncertainties continued to rank high on policymaker’s radars. We believe the central bank will continue to keep a firm grip on the currency (through June 2026, the Bank sold €755m to keep the pair stable).
Source: Refinitiv, ING Forecasts "> Source: Refinitiv, ING Forecasts USD/UAH: NBU efforts to help the hryvnia Spot One month bias 1M 3M 6M 12M USD/UAH 44.81 Neutral 44.78 44.70 44.80 44.90 As the US dollar strengthened globally on the back of the re-escalation of the Middle East conflict in July, the USD/UAH exchange rate stabilised, albeit at an elevated level. The stabilisation resulted from increased volumes of the National Bank of Ukraine’s FX intervention and a surprising interest rate hike of 50bp to 15.5% in late July. The central bank acted in response to rising core inflation and a more challenging inflation outlook for rest of the year.
Nevertheless, the outlook for the hryvnia remains cloudy as the macroeconomic environment remains challenging due to the ongoing war. Even so, the NBU has upgraded its 2026 GDP growth forecasts due to the expanded fiscal stimulus. Source: Refinitiv, ING Forecasts "> Source: Refinitiv, ING Forecasts USD/KZT: Resilience tested by oil flow disruptions Spot One month bias 1M 3M 6M 12M USD/KZT 468.10 Bullish 475.00 480.00 485.00 485.00 The tenge has stabilised in the last four weeks since the June rally.
News headlines may suggest that the recent spike in the oil prices seems to have been offset by disruptions in the oil exports flows through the Caspian Sea. We find financial flows to be more important now, as the continued foreign portfolio inflows amid high real rates are counterbalanced by reduced FX sales by the government, reflected in the growing NBK backlog since June. The decline in total state-driven FX sales to the multi-month low of $0.8bn in July is in line with the trend we identified previously.
This should limit the scope for KZT appreciation in the longer run. Source: Refinitiv, ING Forecasts "> Source: Refinitiv, ING Forecasts USD/UZS: Rangebound amid renewed pause in gold exports Spot One month bias 1M 3M 6M 12M USD/UZS 11912.00 Mildly Bullish 12000.00 12100.00 12150.00 12350.00 The Uzbekistani som has continued to fluctuate around 12,000 per USD, in line with expectations. This seems to coincide with a stabilisation in gold prices, but we doubt that it is the key driver.
With gold exports back on hold after a brief restart in April, the financial impact of gold prices on the FX market should be limited. Despite the widening in the trade deficit to a historical high of $25bn in the 12 months ending in mid-2026, we remain constructive on USZ given the expected eventual restart of gold exports and continued portfolio inflows amid attractive real rates . Source: Refinitiv, ING Forecasts "> Source: Refinitiv, ING Forecasts USD/TRY: CBT’s liquidity easing remains in focus Spot One month bias 1M 3M 6M 12M USD/TRY 47.59 Bullish 48.30 50.10 52.90 58.50 July CPI data supported the decline in annual inflation, although pricing pressures remain widespread.
Geopolitics, administered, and food prices pushed seasonally adjusted monthly inflation higher. Oil prices, with potential spillovers to other commodities, pose risks to the inflation outlook. The CBT’s net FX position improved in June and July, driven by $14.8bn of FX purchases in June and a further $9.0bn in July.
Reserve accumulation is expected to continue, aided by gradual capital inflows and the seasonal current account improvement. The CBT’s Inflation Report on 13 August may provide further guidance on the timing of any easing in liquidity conditions. This would reduce the effective funding rate from 40% to 37%.
Our baseline expects a policy rate move toward 35% in 4Q. Source: Refinitiv, ING Forecasts "> Source: Refinitiv, ING Forecasts USD/ZAR: Not quite as attractive Spot One month bias 1M 3M 6M 12M USD/ZAR 16.34 Bullish 16.50 16.50 16.25 16.00 Investors do not find the rand as attractive as they once did. Last year was about the huge flows into the local bond market as the SARB switched to a 3% inflation target.
But last month, the SARB disappointed the bond market which had been expecting a hike. Admittedly the policy rate is already at 7.00%, but the SARB acknowledges upside risks to inflation and could face further inflation on a bad El Nino later this year. At the same time, the SARB cites a ‘dysfunctional’ municipal sector for constraints on overall growth, with seemingly little improvement expected.
It sees downside risks to growth. The rand can outperform the forwards, but not much more. Source: Refinitiv, ING Forecasts "> Source: Refinitiv, ING Forecasts USD/ILS: Bank of Israel holding USD/ILS above 3.00 Spot One month bias 1M 3M 6M 12M USD/ILS 3.0137 Bullish 3.05 3.05 3.05 3.05 Having cut rates twice this year and intervened to sell the shekel in May and June, the Bank of Israel is managing to keep the USD/ILS above 3.00.
With inflation contained in the middle of the BoI’s 1-3% target range, the expectation is for more BoI easing. In fact, it looks like the markets could be pricing a 50bp rate cut for the 1 September meeting. Our position this year has been that the BoI would fight the strong shekel and we would expect further FX buying should USD/ILS start heading sub-3.00 again.
Domestically, Israel had a soft first quarter for growth but should rebound. October elections could add some volatility here. Source: Refinitiv, ING Forecasts "> Source: Refinitiv, ING Forecasts Content Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives.
The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Authors Rafal Benecki Chief Economist, Poland Rafal Benecki is a Chief Economist at ING in Poland, joining in 2005. Prior to this, he was the head of the Economic Analysis Bureau at Millennium Bank in Warsaw.
He has an MSc in Financial… Peter Virovacz Chief Economist, Hungary Peter Virovacz is a Chief Economist in Hungary, joining ING in 2016. Prior to that, he has worked at Szazadveg Economic Research Institute and the Fiscal Council of Hungary. Peter studied at the… David Havrlant Chief Economist, Czech Republic David joined ING in 2024 as Chief Economist for the Czech Republic.
He gained professional experience at the Czech National Bank and international institutions such as the ECB, the EC,… Mateusz Sutowicz Senior Economist, Poland Mateusz is a Senior Economist based in Warsaw and joined ING in 2025. He graduated from the Catholic University of Lublin and previously worked as a financial market analyst at Bank Millennium for… Dmitry Dolgin Chief Economist, CIS Dmitry is a Chief Economist covering Russia and CIS countries. He joined ING in 2018 and has a decade of experience in macroeconomics and FX strategy with Alfa-Bank and Gazprombank.
Dmitry… Chris Turner Global Head of Markets and Regional Head of Research for UK & CEE Chris is Global Head of Markets and Regional Head of Research for UK & CEE. Together with his team, he provides short and medium-term FX recommendations for ING's corporate and…
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