HUF/USD Outlook:
Slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear driver.
Key drivers:
- Rate gap: The National Bank of Hungary has kept interest rates steady at 6.5%, while the Federal Reserve's rates range between 3.5% and 3.75%, influencing the HUF's relative yields.
- Risk/commodities: The oil market is experiencing volatility, which can impact the forint indirectly through inflationary pressure and economic stability in Hungary.
- One macro factor: Hungary's economic outlook has been revised to negative, raising concerns about fiscal and external risks that may weigh on the forint's performance.
Range:
The HUF/USD is likely to hold within its recent range, showing stability between the extremes.
What could change it:
- Upside risk: A stronger-than-expected report on the US labor market could boost the dollar, leading to a higher HUF/USD.
- Downside risk: A significant deterioration in geopolitical relations affecting US assets could exert downward pressure on the USD, benefiting the forint.
