The current market bias for GBP to HUF is bearish.
Key drivers influencing this trend include:
- The interest rate differential, as the Bank of England (BoE) is expected to lower rates while Hungary's National Bank maintains a disciplined monetary policy.
- Current inflation trends in Hungary, with inflation at 4.3%, raising concerns about potential delays in interest rate cuts that could support the forint.
- Economic outlooks suggest slowing growth and fiscal challenges in both the UK and Hungary, impacting currency stability.
In the near term, GBP to HUF is expected to trade in a stable range relative to the recent lows near 440.5, with fluctuations around the three-month average.
Upside risks include any unexpected strengthening of the pound through improved retail sales data, while downside risks could arise from heightened fiscal concerns in Hungary, affecting the forint's strength.