Goldman Sachs observed the U.S. dollar firming in early trading on Monday as crude and natural gas prices climbed and equities sold off following events over the weekend. The bank framed the moves as being driven less by standard risk-on, risk-off flows and more by changing terms of trade across economies.
Within the G10 cohort, the Norwegian krone and the Canadian dollar outperformed, reflecting their links to energy markets, while the euro and the Japanese yen lagged. In emerging markets, the South African rand and the Indian rupee registered relative strength versus peers.
Among energy-importing nations, Hungary stood out. Weekend parliamentary elections handed victory to the opposition, with Tisza poised to secure roughly a two-thirds super-majority. That outcome gives the governing party the capacity to move quickly on legislation aligned with the EU’s super milestones, which Goldman Sachs says would unblock EU funds and set the stage for eventual euro adoption.
Goldman Sachs said this clearer policy trajectory supports continued appreciation of the forint. The bank highlighted several channels through which the currency could benefit: a reduction in the country risk premium, stronger growth prospects, and improvements in external balance metrics tied to the unlocking of EU financing.
At the same time, Goldman cautioned that higher global energy prices pose a material vulnerability to Hungary’s external position because oil and natural gas imports represent the bulk of the nation’s energy trade balance. Using current price levels for key fuels, Goldman estimated the impact on Hungary’s net energy balance relative to 2025.
Specifically, Goldman Sachs put Brent crude at $103 per barrel and European natural gas at EUR48 per megawatt-hour. At those price points, the bank estimated a deterioration in Hungary’s net energy balance of about 1.3 percentage points versus 2025.
Goldman noted that the prospective inflow of EU funding would more than offset the drag from higher energy import costs. The Recovery and Resilience Facility includes grants equivalent to 3% of projected 2025 GDP and loans equivalent to 1.8% of GDP. In addition, the 2021-2027 EU budget allocations, if disbursed on a regular basis, should amount to roughly 2.5% of GDP per year.
Overall, the bank’s read of market moves on Monday emphasizes the interplay between commodity price shifts and sovereign policy developments, with currency and external balance effects varying sharply across countries depending on their energy exposure and access to external financing.