EUR/HUF: NBH cutting cycle restart and FX impact – ING

💡 DMK Insight

Hungary’s potential rate cuts could shift market dynamics, especially for the HUF. With inflation dropping significantly in January, traders should keep an eye on how this influences the National Bank of Hungary’s policy decisions. If the central bank resumes its rate-cutting cycle post-September 2024, it could lead to a weaker forint, impacting forex pairs like EUR/HUF. This scenario might also ripple through regional currencies, as investors reassess their positions based on Hungary’s monetary stance. Watch for key levels in the HUF against major currencies, as any signs of dovish sentiment could trigger volatility. On the flip side, if inflation trends reverse or external economic pressures mount, the central bank might hold off on cuts, which could strengthen the forint unexpectedly. Traders should monitor inflation reports closely and adjust their strategies accordingly, especially in the lead-up to the September decision.