The GBP to HUF exchange rate has recently shown volatility, trading near 455.8, which is 2.1% below its three-month average of 466. Analysts note that this rate is at a 14-day low, reflecting a stable trading range between 452.9 and 481.7 in the recent months.
Recent market updates indicate that the British Pound (GBP) has struggled to maintain gains following a spike in UK inflation that initially reduced expectations of further rate cuts by the Bank of England (BoE). However, fears of potential tax increases due to heightened borrowing costs have contributed to the GBP's inability to hold its ground. Currently, the focus is on upcoming UK Service PMI data, which could provide insights into economic activity and support the pound if results are positive.
The outlook for the pound remains uncertain due to ongoing internal divisions within the BoE concerning the future direction of interest rates. With key labor market and economic growth data expected soon, forecasts suggest that weak outcomes may increase the likelihood of another rate cut by December, with the markets pricing in an 80% chance.
Meanwhile, the Hungarian Forint (HUF) faces its own set of challenges. A leadership change at the Hungarian central bank could lead to shifts in monetary policy, and weak economic growth projections—only 1.8% for 2025—are undermining investor confidence in the currency. A recent Reuters poll anticipates a 1.7% decline in the HUF against the Euro, exacerbated by a backdrop of softening inflation.
Concerns around fiscal policy and the upcoming parliamentary elections also weigh on the forint. Additionally, Hungary's controversial decision to withdraw from the International Criminal Court raises geopolitical concerns that might affect its economic standing.
Experts warn that these dynamics suggest continued volatility for the GBP/HUF pair. As such, businesses and individuals engaged in international transactions should closely monitor both currencies and consider hedging strategies to mitigate risks associated with shifts in exchange rates.
