EUR/HUF: Forint outlook tied to oil and politics – Societe Generale

Societe Generale analysts say EUR/HUF’s February decline stalled near 374 before a sharp rebound toward 400, with the 50‑DMA at 383/381 acting as key support. They expect possible consolidation between 383 and 396, warning that a break below support could revive the broader downtrend. The bank also links Hungary’s oil sensitivity and upcoming elections to forint prospects.

Key 383/381 support and 420 risk

"In CEEMEA, we expect the National Bank of Hungary to leave the policy rate unchanged at 6.25% today. Hungary’s vulnerability to the oil shock argues against further easing by the monetary authorities. This comes even as headline inflation slowed sharply to 1.4% in February, well below the MNB target rate of 2-4%."

"Elevated geopolitical uncertainty means we now look for an extended period of policy stability. The MNB estimates that a 10% rise in oil prices adds roughly 0.3–0.4pp to headline CPI through both direct and indirect channels, around double the estimated impact for the eurozone."

"Given the low starting point, such an increase would still keep inflation within the tolerance band. Our updated forecasts are for a gradual rise towards 4% by December, assuming oil prices ease back in the coming weeks. However, if crude remains above $100/bbl, inflation could shoot up to 5% by end-2026."

"A squeeze in EUR/HUF towards 420 may compel the MNB to tighten in the near term. On the political front, a market-friendly election outcome next month would likely deflate EUR/HUF toward the 370 area from around 390 currently. We remain constructive on forint and local HUF bonds."

"EUR/HUF decline stalled near 374 in February, and the pair has since staged a sharp rebound. It recently registered an interim high near 400. It will be important to observe whether the pair can form a base and attempt a more sustained reversal. The 50-DMA near 383/381 serves as short‑term support zone. A brief consolidation cannot be ruled out within the limits of 383 and the peak reached earlier this week at 396. If the pair fails to hold above 383/381, the downtrend could resume."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)