iBanFirst foreign exchange market outlook: Euro, dollar and forint forecast for the first quarter of 2024

Some key events that may affect the foreign exchange market in the first quarter of 2024:
Loosening of monetary policy: Following a period of tightening of monetary policy, analysts expect the rate cut cycle to begin in major advanced economies. As central banks take this step, iBanFirst forecasts a return to volatility in foreign exchange markets.

The decline of European economies: Slowing growth in the major economies, Germany and France, has raised concerns that Europe may be on the brink of recession. On the other hand, the performance of the US economy exceeds expectations, which may lead to a strengthening of the dollar and a depreciation of the euro.
Disinflation trend in the euro area: Inflation is showing a more significant decrease than expected within the euro area. The European Central Bank (ECB) adjusted its inflation forecast for 2024, which it lowered from 3.2% to 2.7%.

By 2024, we see that exchange rate fluctuations will return to everyday life and affect the lives of companies participating in trade, regardless of their size. Even a small change in the exchange rate can have a significant impact on the margins of businesses, as well as influence their competitiveness on the international market. In this unpredictable environment, Hungarian import-export companies should proactively manage exchange rate fluctuations, which includes continuous monitoring of foreign exchange markets in order to be informed of the latest trends. In addition, it is recommended to create a personalized currency risk management plan with the help of a suitable expert”

– said Henrik Gergely, sales director of iBanFirst.