HUF & INR - Markets & outlook
Hungarian forint - HUF:
Forint market influenced by global and local factors
The Hungarian forint is affected by geopolitical events like German fiscal policies, Ukraine-Russia negotiations, and potential US tariffs. Recently, the HUF has strengthened, supported by the NBH's hawkish stance after the new governor's appointment in March.
In the medium term, Hungary's weak economy, inflation, and fiscal risks are expected to weaken the HUF. While global events may provide short-term support, local factors will likely drive the FX rate higher, with EUR/HUF possibly exceeding 410 in the second half of the year.
Indian rupee - INR:
The Indian rupee has steadily weakened (like most currencies) against the US dollar on fears that surging energy prices could spur inflation and interest rate hikes.
India is the third-largest oil-consuming country, after the U.S. and China.
India imports most of its oil requirements and higher crude prices tend to push up domestic inflation.
Investors are shedding Asian currencies including the Indian rupee as the dollar surges against major counterparts, driven by expectations that Trump’s anticipated policies—lower corporate taxes and deregulation—will stimulate U.S. growth.
Additionally, Asian currencies face the potential impact of Trump increasing tariffs, particularly targeting China. This combination is expected to bring a phase of heightened uncertainty and volatility for Asian currencies, with bankers noting that even the typically stable Indian rupee will feel the effects of the disruptions Trump’s policies may introduce.
