The GBP to HUF exchange rate is currently range-bound. Key drivers include monetary policy divergence, as the Bank of England (BoE) is expected to cut rates due to slowing inflation and growth, while the Hungarian National Bank (MNB) maintains a disciplined approach despite rising inflation pressures. Additionally, the UK's fiscal concerns could weigh on the pound, while the HUF benefits from currency appreciation linked to MNB's stability measures.
The exchange rate is anticipated to trade within a moderate range as both currencies adjust to their respective monetary policies. Current trends have shown GBP to HUF near recent highs, slightly above its three-month average, indicating stable market conditions.
An upside risk could emerge from stronger-than-expected UK economic data, prompting renewed investment in the pound. Conversely, a downside risk includes prolonged inflation in Hungary, potentially impacting the MNB's monetary easing plans, which could boost the forint against the pound.