GBP/CLP Outlook:
The GBP to CLP rate is currently below its 90-day average and near recent lows, suggesting a bearish outlook. Lack of substantial UK economic data and ongoing political uncertainty are keeping the Pound subdued.
Key drivers:
• Rate gap: The Bank of England's dovish stance on potential interest rate cuts contrasts with Chile's more stable benchmark interest rate, creating pressure on the GBP.
• Risk/commodities: The Chilean peso is facing challenges from the declining mining sector, particularly copper, which has influenced its value negatively.
• One macro factor: Recent inflation data from Chile indicates a potential need for adjustments in monetary policy, which could further impact the peso's performance.
Range:
Expect the GBP/CLP rate to drift within its recent 3-month range, reflecting the current bearish sentiment.
What could change it:
• Upside risk: A sudden improvement in UK economic data or political stability could support the Pound.
• Downside risk: A Federal Reserve rate hike could place additional pressure on the Chilean peso, affecting this currency pair.