Forint Holds Firm as Markets Await MNB and EUR/HUF Shift

Key Moments

Policy Outlook: Dovish Setup at the Magyar Nemzeti Bank

Societe Generale strategists anticipate that Hungary’s central bank, Magyar Nemzeti Bank (MNB), will lower its base rate by 25 basis points to 5.50% today. They highlight that the dovish tone in the July meeting minutes, together with inflation data that came in weaker than expected, has created space for additional policy easing.

According to their commentary, “In CEE, the MNB is widely expected to deliver its fourth 25bp rate cut of the year today, taking the base rate to 5.50%. Dovish minutes of the July meeting and below forecast July CPI of 1.2% yoy paves the way for at least two more cuts as pointed out by Governor Varga in June.”

Looking further ahead, Societe Generale’s emerging markets team sets out their projections for inflation and policy rates: “Our EM colleagues project inflation at 1.5% in 2026 and 2.4% in 2027 and policy easing to 5.00% by end-2026 and 4.00% by end-2027.”

EUR/HUF Price Action and Key Technical Levels

The EUR/HUF pair has recently retreated to around 362 after failing to sustain gains near 368. Strategists at Societe Generale note that this reversal comes after the cross had previously marked an interim low close to 348 in June and has since been engaged in a gradual rebound.

They observe that the exchange rate remains constrained by a resistance band: “EUR/HUF has staged a steady rebound after carving out an interim low around 348 in June. The pair has encountered strong resistance near the late-April high of 368. It appears to be forming a base however clear signals of a large upside are not yet visible.”

From a technical perspective, the 200-day moving average is highlighted as a significant ceiling for the pair in the near term. As they put it, “The 200-DMA, around 371, could act as a short-term resistance; a break above this hurdle is needed to signal an extended rebound. The recent pivot low at 359/358 is first support. A break below this could trigger resumption in the broader downtrend.”

Market Reaction Scenarios Around the Decision

Given the predominantly dovish backdrop, Societe Generale cautions that even a modestly more hawkish-than-expected signal from the MNB could influence the currency pair’s path in the short term. They write, “The dovish set up means that any hawkish pushback could see EUR/HUF gravitate back toward 360 (100dma).”

At present, EUR/HUF is trading in a zone bracketed by well-defined support and resistance levels, with participants watching for a break either below recent lows or above key moving averages to determine the next directional move.

Key Levels Summary