The market bias for the HUF to USD exchange rate is currently bullish.
Key drivers include:
- The interest rate differential remains relevant, with a potential for the Federal Reserve to cut rates by mid-2026, which could weaken the USD.
- The Hungarian National Bank's disciplined monetary policy has supported HUF appreciation.
- Hungary's inflation rise, while slightly below expectations, continues to pose risks, indicating market uncertainty regarding future interest rate decisions.
The near-term trading range for the HUF is expected to stay consistent but may fluctuate given the political and economic landscape in Hungary.
Upside risks include further positive movement in global economic growth, which could strengthen the HUF. Downside risks involve potential increased borrowing by the Hungarian government, which, combined with a negative economic outlook, may pressure the HUF against the USD.
Recent trading shows the HUF to USD at 14-day highs, reflecting its recent stability and slight strength over the 3-month average.