The USD to HUF exchange rate has recently reached 90-day lows near 326.0, showing a marked decline of 1.9% from its three-month average of 332.5. Analysts note that this drop can be attributed to a broader weakening of the US dollar, driven in part by expectations of aggressive Federal Reserve rate cuts, anticipated to begin as soon as March 2026. As the Fed adopts a more dovish stance, particularly in light of rising jobless claims, market sentiment suggests further downward pressure on the USD.
This trend is compounded by mixed signals in the US economic landscape. While the labour market remains resilient, with unemployment levels still low, the manufacturing sector is showing signs of weakness, leading forecasters to predict an overall softening of the USD. Furthermore, as global markets stabilize and risk sentiment improves, demand for safe-haven assets like the dollar has decreased, further contributing to its decline.
In contrast, the Hungarian Forint has recently benefitted from a "financial shield" agreement with the United States, which bolsters its economic standing amidst a challenging fiscal environment and an EU funding freeze. The National Bank of Hungary has maintained its policy rate at 6.5%, indicating a commitment to strict monetary policy that supports the HUF's stability.
Market analysts suggest that as the USD continues to soften, the HUF could see a modest recovery, especially if the financial shield agreements foster confidence in the Hungarian economy. However, persistent inflation and the need for structural reforms as highlighted by the IMF may pose medium-term challenges.
In conclusion, analysts forecast a continued downward trend for the USD against the HUF, influenced by US monetary policy and economic conditions, while recent developments in Hungary could provide some support for the Forint in these volatile market conditions. Watching upcoming US inflation data and Fed communications will be crucial in anticipating future movements in this currency pair.
