Barclays turns bearish on the Hungarian forint, forecasting the EUR/HUF pair to climb as new eurozone work programs divert capital flows and the forint’s rally runs out of steam.
Barclays explicitly stated that the forint’s rally is fading as euro-related work begins, directly implying a bullish reversal for EUR/HUF. The bank’s updated forecast reflects a view that capital will flow into the euro area, lifting the pair.
Barclays revised its EUR/HUF target higher, expecting the pair to climb as eurozone work programs begin and capital flows rotate away from the forint. The exact level was not detailed in the headline, but the direction is clearly upward.
Yes, if EU fund disbursements to Hungary accelerate or the Hungarian central bank tightens monetary policy more aggressively than expected, the forint could stabilize or even resume its rally against Barclays’ call.
Barclays abandoned its early bullish forint call, warning that the Hungarian currency’s recent rally against the euro will fade as new eurozone work programs launch. The bank shifted its EUR/HUF forecast higher, anticipating capital flows will favor the euro area over Hungary. The outlook reversal reflects growing conviction that the forint’s strength was temporary and driven by factors that are now dissipating.
Barclays concluded that the forint’s rally is unsustainable as new eurozone work programs begin, diverting capital flows away from Hungary. The bank sees the recent strength as temporary and driven by fleeting factors that are now fading, prompting a higher EUR/HUF forecast.
The phrase likely points to the launch of EU-funded infrastructure or economic projects within the eurozone, which would increase demand for euro-denominated assets and labor, reducing the relative appeal of Hungarian investments and weakening the forint.
Traders may consider long EUR/HUF positions, as Barclays expects the pair to rise from current levels. The bearish forint call suggests a short-term opportunity but requires monitoring ECB policy and Hungarian central bank actions that could counter the move.