The Hungarian forint staged a modest recovery on Thursday morning after suffering its steepest decline in weeks, as investors continue to react to worsening geopolitical tensions in the Middle East and concerns over Hungary’s public finances.
Forint rebounds after volatile trading
Following Wednesday’s sharp weakening, the forint regained some ground against both the euro and the US dollar in early Thursday trading. Shortly before 7 AM, the euro traded at HUF 360.26, down from HUF 361.57 the previous evening, while the US dollar eased to HUF 315.28 from HUF 317.29. The Swiss franc also slipped slightly to HUF 390.61.
As trading progressed, the Hungarian currency strengthened further, briefly pushing the euro back below the psychologically important HUF 360 level. During the morning session, the common currency was changing hands at around HUF 358.7, suggesting investors were cautiously returning after the previous day’s heavy losses, reports VG.hu.
Trump remarks and Iran conflict shake markets
The forint’s sell-off began after US President Donald Trump announced during the NATO summit that the ceasefire with Iran had effectively collapsed. His subsequent warnings of renewed military action, followed by reported strikes on Iranian port cities, triggered a wave of risk aversion across financial markets.
The geopolitical uncertainty weighed on emerging market currencies, including the forint, while investors closely monitored developments in oil markets and global equities. Although crude prices edged slightly lower on Thursday after Wednesday’s rally, the conflict remains the dominant driver of market sentiment.
Stay up-to-date: Forint takes a hit: Trump’s Iran warning and Hungary’s budget crisis shake markets
Budget concerns add pressure
Domestic fiscal news also contributed to the pressure on Hungary’s currency. Finance Minister András Kármán revealed that the government’s budget review had uncovered an additional HUF 400 billion (EUR 1.1 billion) in previously unreported expenditure inherited from the former administration.
He also said that the 2026 budget deficit could have reached as much as 8.3% of GDP instead of the originally planned 3.7%. According to the minister, the government does not target a specific exchange rate for the forint, but maintaining a stable and predictable currency remains an important objective.
Meanwhile, Hungary’s benchmark BUX index opened Thursday’s session with modest gains as investors attempted to recover from the previous day’s broad market decline, although uncertainty surrounding global events continues to keep markets on edge.
Read also: Hidden EUR 1 billion? Hungary’s Finance Ministry says it uncovered unbudgeted spending
