Goldman Sachs has moved to reduce its EUR/HUF rate forecasts and has launched a short trade recommendation on the currency pair, arguing that the Hungarian forint is likely to appreciate as a result of improved fiscal policy and better inflation outcomes anticipated under the incoming government.
In its updated outlook the bank set EUR/HUF projections at 355, 350 and 345 for the three-, six- and 12-month horizons, respectively. Those figures represent a downshift from the prior projections of 390, 380 and 375.
Alongside the new forecasts, Goldman Sachs initiated a trade to short EUR/HUF with a target of 350 and a stop-loss placed at 372.
Rationale tied to government mandate and EU funding
Goldman Sachs pointed to the incoming Tisza government’s two-thirds super-majority in the Hungarian Parliament as a central element in its view. That parliamentary majority, the bank said, should enable the rapid passage of legislation that could lead to the disbursement of EU funds and advance plans for euro adoption.
The bank noted that EU fund disbursement, as represented in its GSFEER model, has the potential to strengthen the forint. Additionally, the prospect of joining the euro area could put further upward pressure on the forint.
Comparative precedent and model drivers
Goldman Sachs invoked Slovakia’s prior currency convergence as a possible parallel, observing that the Slovak koruna appreciated by about 20% versus the euro during its convergence episode, driven by productivity gains and capital inflows associated with EU and euro area accession.
The bank said sustained convergence of inflation toward 2% would help to stabilise EUR/HUF, while durable improvements in productivity could reduce the currency pair’s fair value further.
Goldman Sachs further estimated that a move of roughly 10% from Thursday’s close would bring the forint to a level consistent with its historical overvaluation peak and to the average valuation of regional peers, including the Polish zloty and the Czech koruna.
These projections and the short recommendation are grounded in the bank’s assessment of fiscal, inflation and accession-related drivers rather than specific short-term market events.