Bias: bullish-to-range-bound, GBP/HUF sits above its 90-day average and in the upper half of the 3-month range, suggesting limited downside but room to drift.
Key drivers:
- Rate gap: BoE is expected to ease gradually, while Hungary's central bank keeps policy tight. This divergence supports the forint versus the pound and keeps moves contained.
- Macro factor: Hungary’s inflation remains above target, delaying any near-term easing by the MNB. The persistence of price pressures limits policy flexibility and keeps the HUF bid in cross-rate moves.
Range: Range: expect the cross to hold in its established band, with a drift toward the upper end and occasional tests of the highs as flows shift.
What could change it:
- Upside risk: markets shift to expect quicker BoE rate cuts than currently anticipated. That would weaken the pound and push GBP/HUF higher.
- Downside risk: stronger UK data or hawkish BoE signals raise the pound. The move would push GBP/HUF toward the lower end.
