The USD to HUF exchange rate shows a bearish bias due to anticipated U.S. Federal Reserve policy adjustments.
Key drivers include the interest rate differential, as further rate cuts in the U.S. could weaken the dollar. Additionally, the Hungarian National Bank's disciplined monetary policy has contributed to recent HUF strength. Inflation trends in Hungary remain a concern, with recent increases possibly delaying any interest rate cuts.
Over the next 1–3 months, the USD/HUF is expected to trade within a stable range, reflecting recent lows near 326.9 which is 1.5% below the 3-month average of 331.9.
An upside risk could come from a surprise improvement in U.S. economic data, while a downside risk may involve worsening inflation or fiscal challenges in Hungary, potentially leading to increased borrowing needs and pressure on the HUF.
