The USD to HUF exchange rate currently displays a bearish bias.
Key drivers include:
- Interest Rate Differential: The Federal Reserve is expected to implement rate cuts in the coming months, which may weaken the USD against the HUF.
- Fiscal Challenges: Hungary's government is increasing its reliance on foreign currency borrowing amid budgetary pressures, potentially impacting HUF strength.
- Inflation Trends: While Hungary's inflation is slightly below expectations, increased core inflation could delay anticipated interest rate cuts by the central bank.
In the near term, the USD to HUF is likely to trade within a stable range, reflecting recent levels but remaining below the three-month average.
Potential upside risks include stronger-than-expected U.S. economic data that could bolster the dollar. Conversely, downside risks could arise from intensified fiscal pressures in Hungary that lead to further currency appreciation against the USD.