USD/HUF Outlook:
Bearish, as the rate is below its recent average and near recent lows, facing pressure from investor shifts away from U.S. assets.
Key drivers:
• Rate gap: The U.S. Federal Reserve has held interest rates steady, while the Hungarian National Bank maintains a higher rate, supporting the forint.
• Risk/commodities: Global shifts toward de-dollarization and reduced U.S. asset investment are impacting the greenback's performance.
• One macro factor: Inflation in Hungary remains above the central bank's target, complicating the economic outlook.
Range:
The USD/HUF is likely to drift lower within its recent range, testing the lower end as the forint strengthens.
What could change it:
• Upside risk: A surprising improvement in U.S. jobless claims could strengthen the dollar.
• Downside risk: Continued geopolitical tensions and further shifts in global investment trends may exert more pressure on the USD.
