Hungarian forint hits four-year high against US dollar

The Hungarian forint strengthened to its strongest level against the US dollar in four years on Friday morning, briefly pushing the exchange rate below HUF 325 per dollar. This marked the first time the forint has reached this level since February 2022, underlining a broader trend of resilience in the Hungarian currency.

Hungarian forint is at its highest against the US dollar

While the forint showed mixed movements against major currencies during the week, its performance against the dollar clearly stood out. According to market data cited by MTI, the dollar slipped from around HUF 325.30 to approximately HUF 324.95 in early trading, placing the exchange rate at its lowest point in more than four years, writes Privátbankár. The Swiss franc also weakened slightly, trading near HUF 411.30.

Against the euro, the Hungarian currency was more stable. On Friday morning, the euro stood at HUF 381.94, only marginally higher than the previous evening. Earlier in the week, the euro briefly dipped to HUF 381.72, its strongest level against the forint since early December, before stabilising.

The reasons behind forint’s vitality

Several factors are behind the forint’s renewed strength, particularly against the US currency. Over the past year, the dollar has gradually lost ground on global markets, a trend many analysts expect to continue. Speculation surrounding future leadership at the US Federal Reserve has added to this outlook, with expectations that a more rate-cut-friendly Fed chair could further weaken the dollar in the coming months.

At the same time, the Hungarian currency itself has been following an upward trajectory for some time. In November last year, the Hungarian currency repeatedly reached one-and-a-half-year highs. Over the course of 2024, the forint strengthened by around 7 percent against the euro and by an impressive 18 percent against the dollar.

Unchanged interest rate also crucial

Domestic factors have also played a role. The Hungarian National Bank (MNB) has maintained firm and consistent communication emphasising its commitment to a stable exchange rate. In addition, the central bank has kept its base interest rate unchanged at 6.5 percent since September 2024, providing predictability for investors and supporting its currency.

On international markets, the euro also gained ground against the dollar, rising to around 1.1752 dollars on Friday morning, compared with 1.1738 the previous evening. This broader weakening of the dollar has further amplified the forint’s recent gains.