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Hungarian forint slips as markets price another MNB rate cut
Société Générale flagged EUR/HUF returning above 363 as investors look for a further 25 basis point cut by the Magyar Nemzeti Bank to 5.75%.
Société Générale has identified the Hungarian forint as the main laggard among Central and Eastern European currencies in July, pointing to renewed pressure on the FX carry trade. The firm said EUR/HUF has moved back above 363 as markets position for another rate cut from the Magyar Nemzeti Bank.
The bank cited a diverging rate path across Hungary, Czechia, and Poland that is reducing the forint’s relative carry appeal. It also attributed part of the pressure to higher energy prices.
In its view, the combination of shifting central bank expectations and energy-related cost pressure is weighing on the forint as traders anticipate the MNB cutting rates again by 25 basis points to 5.75%.