The current market bias for the HUF to USD exchange rate is bearish.
Key drivers include:
- The expected interest rate cuts by the Federal Reserve could weaken the USD in the coming months, creating a more favorable environment for the HUF.
- Hungary's inflation remains a concern, as rising core inflation may delay interest rate cuts by the Hungarian National Bank, impacting the HUF's stability.
- Budgetary pressures from the Hungarian government, alongside increased reliance on foreign currency bonds, indicate potential fiscal instability that could pressure the HUF further.
The near-term trading range for HUF to USD is likely to remain stable, keeping within recent values.
Upside risks include stronger-than-expected economic performance in Hungary or delays in U.S. rate cuts, boosting HUF value. Conversely, downside risks could stem from worsening inflation trends in Hungary or faster-than-anticipated USD depreciation linked to global economic shifts, potentially undermining the HUF.
