Two major European banks have issued conflicting analyses on the Hungarian forint (HUF), creating uncertainty for investors in Central European currency markets. Commerzbank argues that a market repricing has solidified a stable monetary policy outlook for Hungary, while Societe Generale warns that the EUR/HUF downtrend is extending with further weakness ahead.
Commerzbank's Stable View
Commerzbank analysts highlight a critical shift in the HUF market, where assets have been repriced to reflect a more predictable policy environment. The bank points to declining inflation—from double-digit highs to within the central bank’s tolerance band—and a narrowing current account deficit as key drivers. Commerzbank notes that the National Bank of Hungary (MNB) can now maintain its current stance, reducing the need for aggressive intervention. The forint has strengthened against the euro, trading near the 380 EUR/HUF level, and Commerzbank forecasts a range-bound future between 370 and 395 EUR/HUF. The bank recommends a neutral position on the HUF.
Societe Generale's Bearish Warning
In stark contrast, Societe Generale has issued a detailed technical analysis identifying critical support levels for the EUR/HUF pair amid a persistent downtrend. The bank’s strategists highlight the 400.00 psychological level as the first major support, with 395.00 and 390.00 as additional technical floors. Societe Generale warns that a break below 395.00 could trigger a sharper sell-off toward 380.00. The bank attributes the forint’s weakness to Hungary’s stubbornly high inflation, a wide current account deficit, political uncertainty over EU funds, and the euro’s relative strength due to ECB policy. Societe Generale forecasts the EUR/HUF pair could reach 410.00 by year-end, implying further forint depreciation, and recommends clients maintain short positions.
Key Differences
The two banks diverge on the timeline and sustainability of the forint’s trajectory. Commerzbank sees the repricing as complete, with the market having fully adjusted to a new stable policy environment. Societe Generale argues that structural headwinds remain too strong for a sustained reversal, and that the downtrend reflects a slow erosion of confidence. The banks also differ on the MNB’s ability to act: Commerzbank believes the central bank can maintain its current stance, while Societe Generale warns that intervention would only cause temporary reversals.
