The current market bias for the GBP to HUF exchange rate is range-bound. Key drivers include the interest rate differential, with the Bank of England potentially reducing rates while Hungary's central bank maintains a higher rate, creating downward pressure on GBP. Additionally, the UK's tepid economic growth projections and ongoing geopolitical tensions are influencing investor sentiment towards the pound.
In contrast, Hungary shows persistent inflation pressures that may delay interest rate cuts, adding support to the forint. The exchange rate has been stable, trading within a 4.5% range over the last few months.
The near-term range for GBP/HUF can be expected to remain within this established band unless there are significant shifts. An upside risk could arise from improved UK economic data or strong GBP demand, while a downside risk may come from worsening inflation data in Hungary or global economic instability impacting both currencies.