HUF/USD Outlook:
Slightly positive, but likely to move sideways, as the rate is above its recent average without a clear driver.
Key drivers:
• Rate gap: The National Bank of Hungary's steady interest rate contrasts with the Federal Reserve’s paused cuts, supporting the forint.
• Risk/commodities: Geopolitical tensions have spurred a "sell America" trend, leading to reduced demand for the dollar and favoring the forint.
• One macro factor: Persistent inflation challenges in Hungary complicate economic recovery efforts, potentially dampening forint strength.
Range:
The HUF/USD rate is expected to hold within the recent 3-month range, as it remains stable above average.
What could change it:
• Upside risk: A stronger than expected employment report from the U.S. could bolster the dollar.
• Downside risk: Increased political tensions or further moves towards global de-dollarization may weaken the dollar further.
