Bias: bullish-to-range-bound, GBP/BRL sits above its 90-day average and in the upper half of the three‑month range.
Key drivers:
- Rate gap: the BoE is signaling a slower, shallow path of cuts while Brazil’s central bank keeps a tight stance, supporting the pound versus the real.
- Risk/commodities: oil remains near multi‑month highs with elevated volatility, a pattern that tends to restrain BRL on inflation and policy fears, while GBP remains less exposed.
- Macro factor: Brazil’s inflation staying above target keeps the case for further tightening, sustaining BRL support.
Range: GBP/BRL is likely to drift within the three‑month range, with a test of the upper end if risk appetite improves.
What could change it:
Upside risk: stronger UK data and a slower-than-expected BoE easing path could lift GBP versus BRL.
Downside risk: a sharper BRL rally on cooler Brazil inflation and signals of additional tightening, or a softer UK outlook, could weigh on GBP.
