The current market bias for the USD/HUF exchange rate is bearish.
Key drivers include the expected Federal Reserve interest rate cuts, which may weaken the USD. The Hungarian Forint (HUF) has seen recent appreciation due to disciplined monetary policy from the Hungarian National Bank, enabling it to strengthen. Additionally, rising inflation in Hungary, although slightly below expectations, presents risks that might delay interest rate cuts, supporting the HUF further.
In the near term, the USD/HUF exchange rate is expected to trade within a stable range, reflecting its recent performance near the 3-month average.
Upside risks for the USD could emerge from unexpectedly strong U.S. economic data, while a downside risk may be increased fiscal pressures in Hungary, which could negatively impact the HUF's strength.