Bias: range-bound, current GBP/HUF sits above the 90-day average and in the upper half of the 3-month range, with the 90-day average position not confirmed.
Key drivers:
• Rate gap: BoE remains cautious on cuts, while MNB keeps policy tight, narrowing the yield edge for GBP versus HUF.
• Macro factor: UK inflation is easing toward the BoE target, supporting a slower pace of rate cuts and limiting upside for GBP.
• Risk appetite: Global appetite swings tend to lift GBP when risk-on, but risk-off tends to support the HUF as a safe-haven trade.
Range: GBP/HUF is likely to drift within the recent band, with modest pressure toward the upper end if UK inflation comes in cooler than expected.
What could change it:
• Upside risk: BoE signals fewer cuts or keeps rates higher for longer, preserving GBP support.
• Downside risk: UK data disappoints and prompts faster BoE easing, narrowing the rate gap and weighing on GBP.
