USD/HUF Carry Trade Maintains Strength Despite Market Volatility

USD/HUF continues to attract carry trade interest, holding steady near 385.50 as the interest rate differential between the US dollar and Hungarian forint remains favorable for yield-seeking investors. The pair has gained 1.2% over the past week, supported by Hungary's central bank maintaining its 6.50% base rate while the Fed holds at 5.25-5.50%. Despite broader market volatility affecting traditional carry trades like USD/JPY, the USD/HUF combination proves more resilient due to Hungary's persistent inflation concerns requiring sustained high rates. Technical indicators show the pair consolidating above the 50-day moving average at 382.00, with resistance at 388.00. The carry trade's persistence reflects investors' confidence in the interest rate differential remaining wide, as the Hungarian central bank signals no rush to ease policy. Traders should monitor EUR/HUF movements and any shifts in risk sentiment that could trigger unwinding of carry positions.