Hungary: Lower CPI supports NBH cuts – Standard Chartered

FXStreet Insights Team FXStreet

Standard Chartered’s Saabir Salad emphasizes that subdued inflation, aided by a strong Hungarian Forint (HUF) and government measures, has allowed the National Bank of Hungary (NBH) to turn more dovish. Salad cuts his 2026 and 2027 Consumer Price Index (CPI) forecasts and notes NBH projections below target, but still sees upside inflation risks that could slow the easing pace if realized.

Subdued CPI but upside risks remain

"Inflation has remained subdued despite the energy price shock, supported by a strong HUF and government measures, including fuel price caps."

"Headline CPI came in at 1.8% y/y in May, below both our 2.2% forecast and the lower bound of the NBH’s 3% +/-1ppt target range."

"In light of this, we lower our 2026 inflation forecast to 2.2% (from 3.9%, still above the central bank’s forecast), and our 2027 forecast to 2.5% (3.4%)."

"While the central bank assesses inflation risks as balanced, we continue to see risks as skewed to the upside given Hungary’s vulnerability to geopolitical instability."

"The pace of easing could be slower if inflation proves higher than we expect."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD hangs near three-week low, below 0.6950 as traders await US NFP report

AUD/USD hits a three-week low during the Asian session on Friday as the RBA’s dovish shift and a rout in equity markets weigh on the risk-sensitive Aussie. However, the recent slump in US bond yields to a two-month low keeps US Dollar bulls on the back foot and limits losses for the currency pair as traders look to the US NFP report for a fresh impetus.

USD/JPY bounces off three-week low; keeps the red near 157.65 as focus remains on US NFP

USD/JPY bounces off the weekly low set during the Asian session, as bears turn cautious ahead of the US NFP report due later this Friday. The upside seems limited as the recent slump in US bond yields and hopes of Iran war de-escalation undermine the US Dollar. Moreover, a hawkish BoJ and intervention risks support the Japanese Yen, capping the pair.

Gold loses the grip; $4,000 comes next on the downside

Gold sets aside two daily advances in a row on Friday, opening the door to a potential test of the key $4,000 mark per troy ounce. The precious metal’s retracement follows a decent improvement in the sentiment surrounding the US Dollar, solid NFP data and higher US Treasury yields across the board.

Democrats win House and Senate in US midterms: Why isn’t all bad news for crypto

The biggest story this week was Tuesday’s US midterm elections, which saw Democrats win control of both the House and the Senate in a clear blue wave. This political shift in the US has triggered sharp price swings across the cryptocurrency market.

Week ahead – Inflation and geopolitics in focus as US political landscape shifts

Post-midterm election euphoria fizzles out as risk aversion prevails. US CPI, PPI and Fedspeak on the radar as Fed hike bets remain supported. Oil retreat pauses on mixed hopes about the ongoing conflicts.

US Dollar breaks below 101.50 as Democrats sweep Congress

The US Dollar (USD) comes under heavy selling pressure on Wednesday, with the US Dollar Index (DXY) falling around 0.5% to trade near 101.35 after sliding below the 101.50 level. The Greenback retreats to its lowest level in four weeks as investors reassess the political and economic outlook following the Democratic Party's sweeping victory in the United States (US) midterm elections.