EUR/HUF to trend higher amid the risk of withdrawal of funds – Commerzbank

The EU Commission is really tightening the thumbscrews, threatening Hungary to withhold funds. Subsequently, economists at Commerzbank expect the EUR/HUF pair to race higher.

Risk premium on HUF

“The fact that the EU is getting serious should make the market realize that the risk is real and that Hungary may have to forgo substantial sums. However, since the Hungarian government has already shown its will for agreement, the risk premium on the HUF may be somewhat lower.”

“The process poses downside risks for the HUF as long as it is not clear what the EU Commission's final decision will be. Therefore, EUR/HUF is likely to trend higher.”