GBP/HUF Outlook:
The GBP/HUF market is likely to decrease as the rate is currently below its recent average and near recent lows. Recent developments indicating potential rate cuts by the Bank of England add to the downward pressure.
Key drivers:
• Rate gap: The Bank of England is leaning towards a potential rate cut, while the National Bank of Hungary maintains a stable rate, which supports the forint against the pound.
• Risk/commodities: The uncertainty from global geopolitical tensions is hurting the pound, making it less attractive to investors compared to the more stable forint.
• Macro factor: The UK's ongoing inflation pressures are leading to expectations of a cut in interest rates, further weighing on the GBP.
Range:
GBP/HUF is likely to drift within its recent range, staying below average without significant movement toward the extremes.
What could change it:
• Upside risk: Strong UK retail sales data could bolster the pound and counter cuts expectations.
• Downside risk: If geopolitical tensions worsen, the GBP could face additional selling pressure, weakening further against the forint.
