HUF: Makes sense – Commerzbank
Source Fxstreet
The Hungarian forint has recovered somewhat from its recent low while world markets were in turmoil. It appears that a stronger-than-expected inflation reading for July helped the recovery yesterday, at least at the margin. In July, all three underlying inflation indicators provided by the National Bank (MNB) were strong, with the tax-adjusted core inflation measure rising by 0.64% m/m compared with 0.5% m/m in June, Commerzbank’s FX strategist Tatha Ghose notes.
Slight further rate cuts are expected
“The ‘conditioned reflex’ of the market – wherein stronger inflation data boost the currency and weaker inflation data hurt the currency – need not make rational sense. An upward inflation surprise would help the currency only if it meant that the central bank would adjust interest rates strongly in response; else, the reaction should be the opposite.”
“In MNB’s case, slight further rate cuts are expected, but the base rate level is still relatively high (6.75%) and if monetary easing were to stop after just a 25bp further reduction, then the monetary stance would remain reasonably restrictive. Conversely, a series of further rate cuts could be detrimental.”
“In other words, the sensitivity of policy to inflation is high. Signs that underlying inflation is accelerating can make a significant difference to MNB’s easing plans – perhaps, the July data will have this effect. Hence, it is consistent that the stronger-than-expected July print had a HUF-positive effect.”
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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Bitcoin experienced a sharp decline this weekend, briefly erasing its 2025 gains and dipping below its year-opening value of $93,507. The cryptocurrency fell to a low of $93,029 on Sunday, representing a 25% drop from its all-time high in October. Although it has rebounded slightly to around $94,209, the pressures on the market remain significant.
The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus.
Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
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