GBP/HUF Outlook:
Slightly weaker, but likely to move sideways as the rate is below its recent average and constrained by mixed economic data.
Key drivers:
• Rate gap: The Bank of England held interest rates steady while the National Bank of Hungary maintained a higher rate, which generally supports the forint.
• Risk/commodities: Crude oil prices have remained volatile, influencing both currencies, but particularly affecting the forint due to Hungary's reliance on energy imports.
• One macro factor: The UK's mixed economic signals, including modest retail growth but rising inflation, complicate GBP's outlook.
Range:
The GBP/HUF is likely to remain confined within its recent 3-month range, with limited movement expected compared to previous highs.
What could change it:
• Upside risk: A surprising increase in UK GDP figures could boost the pound and drive the rate higher.
• Downside risk: Further indications of economic weakness in the UK or escalating political uncertainty may push the GBP lower.
