GBP/CLP Outlook:
The GBP/CLP rate is currently below its recent average and near recent lows, primarily due to pressures from potential Bank of England rate cuts. This situation is likely to lead to a slight decrease in the exchange rate as market concerns persist.
Key drivers:
• Rate gap: The Bank of England's cautious approach on interest rates contrasts with the Central Bank of Chile's stable outlook, adding pressure on the GBP.
• Risk/commodities: A decline in copper production forecasts has increased uncertainty around the CLP, potentially affecting its value against the GBP.
• One macro factor: The recent increase in the UK's Consumer Price Index has raised speculation about monetary policy changes from the Bank of England.
Range:
The GBP/CLP is expected to drift within its recent range as it struggles to regain footing above the average level.
What could change it:
• Upside risk: A surprising rebound in UK retail sales or services data could boost the GBP.
• Downside risk: If the Bank of England signals a definitive rate cut, the GBP may weaken further against the CLP.