USD/HUF Outlook: Slightly weaker, but likely to move sideways as the rate is below its recent average and has no clear driving factors currently.
Key drivers:
• Rate gap: The US Federal Reserve is expected to implement additional rate cuts, while the National Bank of Hungary has maintained a steady interest rate, which supports a stronger HUF.
• Risk/commodities: Ongoing geopolitical tensions and threats of US military actions have raised uncertainty for the USD, putting further pressure on its value.
• One macro factor: Hungary's inflation is showing signs of decline, allowing for a more favorable economic outlook and increasing investor confidence in the HUF.
Range: The USD/HUF is likely to drift within its recent 3-month range, with limited movement expected.
What could change it:
• Upside risk: A sudden shift in US monetary policy or positive US economic data could strengthen the USD.
• Downside risk: Continued geopolitical tensions or a worsening of the US economic outlook could further weaken the USD.
