Hungarian Forint Lags as MNB Rate Cut Looms: SocGen

Société Générale has identified the Hungarian forint as the main laggard in Central and Eastern European (CEE) currency markets for July. The euro-forint pair has moved back above the 363 level, reflecting mounting expectations that the Magyar Nemzeti Bank (MNB) will deliver another 25-basis-point rate cut.

The bank notes that the forint's underperformance is directly tied to the anticipated easing cycle. Markets are already pricing in the cut, which would further widen the interest rate differential between Hungary and its peers.

Société Générale's assessment suggests that unless the MNB surprises with a more cautious stance, the forint may continue to face headwinds in the near term.