Forecasts for EUR to HUF
The recent forecasts for the EUR to HUF exchange rate suggest a complex interplay of geopolitical factors and economic fundamentals impacting both currencies. The Euro (EUR) has strengthened recently, buoyed by positive developments in German politics, specifically the coalition agreement between the CDU and SPD, which has boosted sentiment for the Eurozone's largest economy. Analysts point to a negative correlation between the euro and the US dollar, alongside a significant preference for safe-haven assets, allowing the euro to maintain a positive trajectory amidst ongoing risks.
Currently, the EUR/HUF exchange rate is observed trading at 60-day highs near 409.6, which is notably 1.3% above its three-month average of 404.5. The currency pair has shown stability, fluctuating within a 4.1% range, from 397.6 to 413.8. However, experts caution that while the recent rally has been promising, the Hungarian Forint (HUF) may face pressures moving forward. The Forint's recent strength is attributed to the hawkish stance of Hungary's National Bank following the appointment of a new governor. Nonetheless, the outlook remains dim for the HUF as economists expect ongoing economic weaknesses, inflationary pressures, and fiscal risks to drive the exchange rate higher, with forecasts suggesting it could exceed 410 in the second half of the year.
Additionally, the broader economic context, prominently influenced by energy prices, cannot be overlooked. With the oil prices currently at 64.76 USD, which is 12.2% below its three-month average, the volatility in energy markets adds another layer of uncertainty. Given the intense fluctuations seen in oil prices—spanning a highly volatile range from 61.58 to 82.16—there is concern that shifts in energy costs could further sway both the EUR and HUF in unpredictable ways.
In summary, while positive political developments may temporarily support the euro, external pressures, particularly from the ongoing war in Ukraine and energy market volatility, along with underlying economic issues in Hungary, are likely to maintain market volatility and influence future EUR/HUF exchange rate movements.
