GBP/HUF Outlook:
The GBP/HUF exchange rate is likely to decrease as it is currently 2.1% below its recent average and near the lower end of the 3-month range. Recent political uncertainty in the UK adds pressure on the Pound.
Key drivers:
• Rate gap: The Bank of England's dovish stance on interest rates contrasts with Hungary's higher rates, which may strengthen the Forint.
• Risk/commodities: Oil prices remaining below average can impact the UK economy negatively, affecting the GBP.
• One macro factor: Increased political jitters and upcoming by-election results heighten uncertainty surrounding the UK's economic outlook.
Range:
Movement of GBP/HUF is likely to hold within the recent range, reflecting current pressures on the Pound.
What could change it:
• Upside risk: A surprise victory for Labour in the by-election could boost GBP.
• Downside risk: Continued political instability in the UK may further weaken the Pound.