GBP/CLP Outlook:
The GBP/CLP rate is currently below its recent average and near recent lows, indicating a bearish outlook. Key developments affecting both currencies could exert further pressure on the exchange rate.
Key drivers:
• Rate gap: The Bank of England has maintained steady interest rates while the Central Bank of Chile has also held rates steady, contributing to the GBP's relative weakness.
• Risk/commodities: Recent challenges in the Chilean mining sector have negatively impacted the CLP, as concerns about copper production have resulted in depreciation against the GBP.
• One macro factor: Chile's recent CPI data exceeded expectations, raising inflation concerns and potential adjustments to monetary policy by the Banco Central de Chile, further weakening the CLP.
Range:
Expect the GBP/CLP to range around its recent levels, with potential for slight movements within its 3-month trading band.
What could change it:
• Upside risk: A significant improvement in the UK’s economic indicators could strengthen the GBP.
• Downside risk: An interest rate hike by the US Federal Reserve could exert additional downward pressure on the CLP against the GBP.