Goldman Sachs Shorts EUR/HUF on Hungary's Euro Prospects

Goldman Sachs Recommends Shorting Euro vs Forint

Goldman Sachs has issued a new recommendation for traders to short the euro against the Hungarian forint. The investment bank significantly lowered its EUR/HUF forecasts following discussions by Hungary's incoming leaders about potentially joining the Eurozone.

Shifting Currency Outlook

The recommendation comes after Hungary's recent ballot, which spurred conversations about adopting the single currency. According to Goldman Sachs strategist Teresa Alves, this political development creates a favorable outlook for the forint's appreciation against the euro. The forint was trading around 361 at the time of the report.

Revised Forecasts and Trade Details

The bank initiated a new short trade on EUR/HUF with a price target of 350 and a stop-loss of 372. Reflecting this new stance, Goldman revised its 3, 6, and 12-month forecasts for the pair to 355, 350, and 345, respectively. This is a substantial reduction from the previous targets of 390, 380, and 375.

Conclusion and Forward Look

Strategists note that a significant appreciation of the forint, potentially around 10%, would align its valuation with regional peers like the Polish zloty and Czech koruna. Traders will be closely watching for further political signals regarding Hungary's path to euro adoption.

FAQ

Q: What is Goldman Sachs' new trade recommendation?
A: The bank recommends shorting the EUR/HUF currency pair, setting a target of 350 and a stop-loss at 372.

Q: Why did Goldman Sachs change its EUR/HUF forecast?
A: The revision is based on discussions from Hungary's new leadership about the prospect of adopting the euro, which is expected to strengthen the forint.

Source: Investing.com