EUR/HUF Outlook:
The EUR/HUF is currently elevated near recent highs, trading just below its 90-day average. The ongoing rise in energy prices, particularly oil, puts pressure on the Euro, affecting its position against the forint.
Key drivers:
- Rate gap: The Hungarian National Bank has recently reduced its interest rate, while the European Central Bank grapples with rising energy inflation, benefiting the HUF.
- Risk/commodities: Elevated oil prices, now at 90-day highs, negatively impact the Euro as they raise energy costs within the Eurozone.
- One macro factor: Germany’s poor retail sales figures highlight challenges in consumer spending, fueling concerns over the Euro’s stability.
Range:
The EUR/HUF is likely to drift within its current 3-month range.
What could change it:
- Upside risk: A de-escalation in geopolitical tensions could lead to a stronger Euro if energy fears diminish.
- Downside risk: Continued rises in energy prices could further weaken the Euro against the forint.
