USD/HUF Outlook: Slightly weaker, but likely to move sideways, as the rate is below its recent average and mid-range within the current trading band.
Key drivers:
• Rate gap: The U.S. Federal Reserve's pause on rate cuts contrasts with Hungary's stable interest rate, giving the forint some support against the dollar.
• Risk/commodities: Recent volatility in commodity markets has driven demand for safer currencies, putting pressure on the dollar as investors seek stability.
• One macro factor: The Hungarian central bank's projection for inflation to fall below 3% positively influences the forint's outlook, potentially allowing for future rate cuts.
Range: USD/HUF is expected to drift within its recent range, continuing to reflect the recent downturn.
What could change it:
• Upside risk: A strong jobs report from the U.S. could boost the dollar and push USD/HUF higher.
• Downside risk: Renewed geopolitical tensions or negative U.S. economic data could further weaken the dollar and support the forint.
