Hungarian Forint Weakens Past 356 per Euro as Dollar Gains Strength

The Hungarian forint slipped below the 356‑per‑euro level on Tuesday, a price last seen on June 24 and earlier in early June. The decline is linked to a stronger U.S. dollar, which has pushed the euro‑dollar pair below 1.14, and to high U.S. Treasury yields that signal possible further Fed rate hikes. Global investors are shifting away from emerging‑market assets, selling local‑currency bonds and converting proceeds into dollars, which adds pressure on the forint.

Despite the recent weakness, the forint recorded the third‑best six‑month performance among emerging‑market currencies, trailing only the Brazilian real and Colombian peso. The spread on Hungary’s sovereign‑default insurance (CDS) fell from about 110 basis points in January to around 70 basis points by the end of June, reflecting improved risk perception. The Hungarian National Bank cut its policy rate by 25 basis points at the end of June and signalled that further easing could be possible, a move that may help stabilise the currency. Analysts expect the euro‑forint rate to trade between 348 and 362 in the coming weeks.