The USD to HUF exchange rate is currently range-bound.
Key drivers include:
- The divergence in interest rates, with potential for three Federal Reserve rate cuts by mid-2026, which could weaken the USD.
- Hungary's disciplined monetary policy has contributed to the HUF’s recent appreciation, supported by a favorable currency-swap agreement with the U.S.
- Rising inflation in Hungary, specifically core inflation exceeding acceptable levels, may delay upcoming interest rate cuts from the National Bank.
In the near term, the exchange rate is expected to remain stable within a narrow range, hovering near recent highs.
An upside risk affecting the USD may stem from stronger-than-expected U.S. economic data or reduced rate cut expectations. Conversely, a downside risk could arise from worsening fiscal conditions in Hungary or further increases in inflation, leading to pressure on the HUF.
