GBP/HUF Outlook:
The GBP/HUF exchange rate is slightly weaker and likely to move sideways, as it is currently below its recent average and within its mid-range. The lack of a clear driver is contributing to this stable outlook.
Key drivers:
• Rate gap: The Bank of England's interest rate remains steady at 4%, while the National Bank of Hungary holds a higher rate of 6.5%, benefiting the HUF.
• Risk/commodities: Oil prices are currently stable, which helps reduce volatility for both currencies involved in international trade.
• One macro factor: Hungary's record high foreign exchange reserves are enhancing investor confidence and supporting the forint against the pound.
Range:
The GBP/HUF rate is expected to hold steady within its recent 3-month range as it continues to navigate the current economic landscape.
What could change it:
• Upside risk: A stronger-than-expected UK economic performance could lift the pound.
• Downside risk: Geopolitical tensions could lead to increased risk aversion, negatively impacting the GBP.