Societe Generale analysts expect the National Bank of Hungary to keep its policy rate unchanged at 6.25% today. Hungary’s headline CPI rose to 1.8% year on year in March from 1.4% in February, which was less than estimated.
The analysts note that geopolitical risks and oil prices may limit near-term scope for policy moves. They also refer to a scenario involving the exit of Prime Minister Viktor Orbán and an absolute majority for the TISZA party.
Currency Technical Outlook
On the currency, they report EUR/HUF continued to fall after failing to hold above the 200-day moving average in March. They place an interim low near 360.
They describe the daily MACD as deep in negative territory, with no reversal signal yet. They say the February low near 374 could act as resistance if there is a rebound.
If 360 does not hold, they project further downside towards 357 and 353. Over the medium term, they project EUR/HUF at 340–350 and expect Hungarian government bond yields and rates to compress across the curve, especially at the long end.
The political shift we saw last year with the TISZA party’s majority is continuing to drive the forint’s strength. The forecast for a lower EUR/HUF exchange rate is supported by the gradual release of EU funds, with the European Commission having recently unlocked a further €2 billion in cohesion funds for Hungary in the first quarter of 2026. This confirms our view that the country’s risk premium is compressing.
Macroeconomic data reinforces this outlook for a stronger forint. With headline inflation now stable around 3.6% as of March 2026, the Hungarian National Bank has more policy flexibility than it did last year when geopolitical risks were a greater concern. We have also seen Hungarian 10-year government bond yields fall to around 5.9%, a significant compression from levels above 7% in early 2025.
Options Strategy Ideas
Given the strong downward momentum, traders should consider buying EUR/HUF put options to profit from further declines in the exchange rate. With the pair currently trading near 355, options with strike prices of 350 or 345 could offer good value in the coming weeks. This strategy allows for participation in the downside while strictly limiting risk to the premium paid.
For a more cost-conscious approach, a bear put spread is an attractive alternative. This involves buying a put option, for instance at the 352 strike, while simultaneously selling a lower strike put, such as one at 347. This trade structure lowers the initial cash outlay but caps the maximum potential profit, making it ideal for a moderate and steady decline.
We must remain aware of potential short-term rebounds, as the daily MACD indicates the downtrend may be stretched. Looking back, the low of around 374 from February 2025 should now serve as a major resistance level on any unexpected rally. A break above this historical point would signal a potential short-term reversal and a reason to reconsider bearish positions.
