GBP/CLP Outlook: Slightly weaker, but likely to move sideways as the rate is below its recent average and mid-range, lacking a clear driver.
Key drivers:
• Rate gap: The Bank of England's potential future rate cuts contrast with the Chilean Central Bank's decision to maintain rates, supporting the British Pound (GBP) against the Chilean peso (CLP).
• Risk/commodities: Stable copper prices and positive economic forecasts have bolstered the Chilean Peso, affecting UK exporters negatively.
• One macro factor: The recent decline in UK inflation and slower growth is compounding pressure on the GBP, leading to an uncertain outlook for its recovery.
Range: The GBP/CLP is likely to hold steady within its recent range, given the absence of a strong directional driver.
What could change it:
• Upside risk: Unexpected improvements in UK economic data could support GBP demand.
• Downside risk: A sharp rise in global uncertainty or volatility could enhance the attractiveness of the CLP, putting further pressure on the GBP.
