The Hungarian forint has outperformed other regional currencies over the past year, supported by expectations of political change and improved relations with the EU. It also benefited during a period when the euro was rising.
Market reaction strengthened after opposition party Tisza won the April 2026 election by a landslide. The result delivered a constitutional super‑majority and was backed by record voter turnout.
Following the election outcome, Commerzbank revised its forecast path for the forint to be stronger. The report linked the move to expectations that Hungary’s EU isolation could ease and EU funds could be released.
The article was produced using an Artificial Intelligence tool and reviewed by an editor.
The landslide victory is a structural shift for the Hungarian forint, creating a clear trend for the coming weeks. We saw a similar dynamic in Poland after their late 2023 election, where a new pro-EU government led the zloty to rally over 5% against the euro in the following months. We should therefore position for sustained HUF strength against both the euro and the dollar.
To act on this, we should consider buying HUF call options or, more directly, selling EUR/HUF futures. Implied volatility has likely spiked on this news, making options expensive, but the strong directional momentum is expected to overcome this cost. Looking back, one-month EUR/HUF volatility often lingered around 8-10% during stable periods in 2025, but this political shock will justify higher premiums in the short term.
The fundamental driver will be the anticipated release of over €20 billion in EU cohesion and recovery funds, which had been frozen. The prospect of this capital flowing into the Hungarian economy greatly improves the country’s balance of payments and investor sentiment. This is a powerful tailwind that the market has only just begun to price in.
We must also monitor the Hungarian National Bank (MNB), which held one of the EU’s highest policy rates through 2025 to fight inflation. A stronger forint eases inflationary pressure, giving the MNB a green light to consider rate cuts later this year. For now, however, they will likely wait for stability, meaning the high interest rate will continue to attract capital and support the currency.
For the immediate future, the path of least resistance is a lower EUR/HUF exchange rate. The market will be pricing in a best-case scenario of rapid policy reform and a reset in EU relations. We should therefore maintain short EUR/HUF positions, targeting levels not seen since before the energy crisis of the early 2020s.
