The Hungarian forint (HUF) strengthened to its highest level in four years against the euro following the victory of the opposition Tisza Party over Prime Minister Viktor Orbán’s Fidesz–KDNP in Sunday’s parliamentary election.
The EUR/HUF exchange rate fell below the key 370 threshold on election night, even before Monday’s market opening, currently standing at 366.5. The move extended a broader pre-election trend, during which the forint had already strengthened from above 383 to around 375 in the final trading week. In total, the currency has appreciated by nearly 4 per cent against the euro in a matter of days, marking one of its most significant short-term rallies in recent years.
The positive market reaction is linked to Prime Minister-elect Péter Magyar’s more EU-aligned policy promises and the potential unlocking of currently frozen EU funds. The European Commission decided to withhold funding from Hungary over rule-of-law concerns at the end of 2022. The incoming government has pledged to secure access to these funds, estimated at around €17 billion, with a deadline set for August 2026.
‘Analysts warn that the current rally may partly reflect short-term positioning’
Analysts expect the positive momentum to continue in the immediate aftermath of the vote, with the forint potentially gaining an additional 1–3 per cent. However, they caution that much of the political shift has already been priced in, suggesting that further appreciation is likely to remain limited. Over a longer horizon, the sustainability of under-370 levels is seen as unlikely, as investor focus gradually shifts back to Hungary’s macroeconomic fundamentals.
Beyond the currency market, Hungarian government bonds are expected to benefit from improved sentiment, with ten-year yields projected to decline by 50–80 basis points in the coming weeks. Equities have also responded positively, with the BUX index likely to outperform global benchmarks in the short term, driven by declining risk premiums and expectations of renewed capital inflows.
Still, analysts warn that the current rally may partly reflect short-term positioning. ‘The election result may bring euphoria to markets in the short term, but the coming months will determine whether this marks a durable new equilibrium or merely a strong but temporary rally,’ said Gábor Bukta, head of analysis at Concorde.
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