Forint breaks psychological barrier, strengthening to long unseen level

The forint strengthened against the euro to a level not seen for more than a year in the early afternoon on Wednesday.

At the time of the writing of this article, one euro costs HUF 369. The last time the exchange rate was below 370 was at the end of February last year, around the outbreak of the Russian-Ukrainian war, Telex reports.

On Tuesday evening, the euro was quoted at HUF 371.45. Meanwhile, on Wednesday at around 5 PM Hungarian time, the exchange rate stood at HUF 369.21. This may be due to the moderation in domestic inflation, as reported by the Hungarian Central Statistical Office (KSH) this morning, and better-than-expected inflation data in the US, according to Portfolio.

The last time we saw a similar strengthening was in mid-April. Just like now, international sentiment was the main driver behind the forint’s soaring performance. In April, the Hungarian currency weakened back to its previous level within a few hours. There is a chance that this will happen again. However, breaking the 370 barrier is still an important development.