EUR/HUF Outlook:
The EUR/HUF rate is currently trading below its 90-day average and is near recent lows, indicating a bearish outlook. Market pressures stemming from weak Eurozone data contribute to this trend.
Key drivers:
• Rate gap: The European Central Bank is maintaining an accommodative monetary policy while the National Bank of Hungary holds steady at a higher interest rate, supporting the forint.
• Risk/commodities: Oil prices are currently above their average, which traditionally supports the forint as Hungary is an oil importer, but higher costs can pressure the economy.
• One macro factor: The Eurozone's industrial production dropped significantly, signaling economic weakness that could further impact the euro.
Range:
The EUR/HUF may continue to drift lower within its recent 3-month range as pressures persist.
What could change it:
• Upside risk: A surprise rebound in Eurozone economic indicators could strengthen the euro.
• Downside risk: Increased geopolitical tensions could further weaken the euro against the forint.