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Forint slides under risk-off pressure as EUR/HUF holds above 361

ING cites crowded long positioning and profit-taking, and expects EUR/HUF to stay mostly within 350 to 360 for the rest of the year.

Reported · Written up by our desk · EM Currencies

ING’s Frantisek Taborsky says a broad risk-off move in Central and Eastern Europe has hit Hungarian assets, with elevated oil prices and higher core yields pushing local rates higher and driving heavy selling in Hungary, which he attributes to crowded long positioning and risk reduction after global uncertainty.

Taborsky notes that implied central bank odds have shifted, with Hungary’s expected easing cycle scaled back from 150 basis points a few days ago to 120 basis points, while other CEE markets show different cut expectations, including Poland at around 20% for this year.

Despite the sell-off, ING still views Hungarian rates and FX as attractive, saying the recent drop appears overdone and that EUR/HUF has stabilised above 361, near post-election levels.

ING’s base case is that EUR/HUF will trade mostly in a 350 to 360 range for the remainder of the year, after the currency held above the mid-361 area following the recent move.

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