USD/HUF Outlook:
The USD/HUF is likely to decrease as it currently trades below its recent average and is near recent lows. Pressures from the US economic outlook and geopolitical tensions are weighing on the US dollar.
Key drivers:
- Rate gap: The US Federal Reserve's interest rates are under scrutiny as economic growth shows signs of slowing, which can weaken the USD against the HUF.
- Risk/commodities: Global uncertainty, particularly surrounding potential military actions involving the US, is driving safe-haven demand but may be benefiting the HUF.
- One macro factor: Hungary's record-high foreign exchange reserves contribute to stability for the HUF, enhancing investor confidence amid fluctuations in global markets.
Range:
The USD/HUF is expected to drift within its recent range, facing mixed signals.
What could change it:
- Upside risk: A stronger-than-expected US GDP report could provide support for the USD.
- Downside risk: Continued geopolitical tensions and a decline in US labor market data could further pressure the USD.