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How the Hungarian Forint Strength Index Works

How the Forint Strength Index is calculated

The index divides today's weighted currency basket by its value on 4 January 1999 and multiplies by 100. Six currencies carry fixed weights - EUR 50%, USD 20%, CHF 10%, GBP 10%, PLN 5%, CZK 5% - and every rate comes from the European Central Bank. Nothing below is estimated or forecast.

Overview

The Forint Index (FI) measures the overall strength of the Hungarian Forint (HUF) against a weighted basket of six major currencies. It provides a single number that captures whether the Forint is strengthening or weakening relative to its key trading partners and financial counterparts.

A value of 100 represents the baseline - meaning no change from the reference period. Values above 100 indicate a stronger Forint (fewer HUF needed per unit of foreign currency), while values below 100 indicate a weaker Forint.

Reference Period (Baseline)

The HUF-Index uses a fixed anchor date: 4 January 1999, when the weighted basket was worth 0.0116405. Every index value divides the current basket by that figure and multiplies by 100, so a reading of 100 would mean the Forint sits exactly where it did on the anchor date. Current readings are well below 100 because the Forint has weakened substantially since 1999.

Note: this is the same approach as the U.S. Dollar Index (DXY), which is fixed to a March 1973 base of 100.00. The "vs 30 days ago" percentage shown beside the index on the dashboard is a separate short-term change measure - it is not the index baseline.

Currency Basket & Weights

The index uses six currencies, weighted by their economic and financial importance to Hungary:

Weight rationale: EUR reflects Hungary's dominant trade relationship with the Eurozone (~65% of total trade). USD captures global commodity pricing and reserve currency dynamics. CHF accounts for Switzerland's role as a financial counterpart and the historical significance of CHF-denominated mortgages in Hungary. GBP represents the UK's financial sector linkage. PLN and CZK provide regional Central European (CEE) peer comparison, reflecting Hungary's close economic ties with neighboring EU members.

Calculation Formula

The index uses a weighted arithmetic average of percentage changes across all basket currencies:

FI = (Σ (wi × Rnow, i) / 0.0116405) × 100

Where:
  Rnow, i = Current exchange rate (1 HUF → foreign currency i)
  wi = Weight of currency i in the basket
  0.0116405 = Reference basket value on 1999-01-04 (Anchor date)

When Rnow is higher than Rref (meaning 1 HUF buys more foreign currency), the percentage change is positive and the index rises - indicating a stronger Forint.

Note: where DXY uses a geometric weighted product, the Forint Index uses an arithmetic weighted sum, for clarity and consistency.

What does a given index reading mean?

Because the anchor is 4 January 1999 and the Forint has weakened substantially over that span, the index sits well below 100 and will keep doing so unless the Forint recovers decades of ground. The absolute number is therefore not a score out of 100, and a reading below 100 is not a warning signal - it is a statement about 1999.

A reading of 55 means the basket buys roughly 55% of what it bought on the anchor date - the Forint has lost about 45% of its 1999 value against these six currencies combined. What matters day to day is the change: a move from 55.0 to 55.5 is a 0.9% strengthening, and it is that direction and pace, not the level, that the dashboard's 7D, 30D, and 1Y figures are built to show.

Comparing across ranges is safe precisely because the anchor never moves. The value plotted for any given date is the same whether you are viewing the 1-month or the maximum range, so trends can be read across time spans without recalibration.

Color Coding

All visual indicators follow a Forint-first perspective:

Data Sources

Exchange Rates: Sourced from the European Central Bank (ECB) via the Frankfurter API. Rates are updated daily on ECB business days.

Economic Indicators: Sourced from Eurostat, the official statistical office of the European Union. Indicators include GDP growth, inflation (HICP), unemployment rate, 10-year government bond yields, industrial production, government debt, and current account balance.

MNB Base Rate: The Hungarian National Bank (MNB) base rate schedule and rate history are maintained based on official MNB announcements.

Economic Factors

The Forint Strength Factors section analyzes 8 key macroeconomic indicators to determine overall pressure on the Hungarian Forint. Each indicator is classified as:

The overall sentiment bar aggregates these signals to provide a composite view of fundamental pressure on the currency.

Classification is based on fixed threshold rules applied to each indicator's latest value. This approach prioritizes simplicity and consistency. It does not account for market expectations, consensus forecasts, or inter-indicator correlations.

Limitations & Disclaimer

This index is provided for informational and educational purposes only. Please be aware of the following limitations: