GBP/CLP Outlook:
Bearish, as the rate is below its recent average and near recent lows.
Key drivers:
• Rate gap: The Bank of England's dovish stance contrasts with the Central Bank of Chile's recent interest rate cut aimed at supporting growth.
• Risk/commodities: Recent declines in oil prices have contributed to a weaker risk appetite, influencing the Chilean Peso negatively.
• One macro factor: The UK's mixed economic indicators, including modest retail sales growth and rising inflation, create uncertainty for the Pound.
Range:
GBP/CLP is likely to drift around its recent lows, remaining within its 3-month trading range.
What could change it:
• Upside risk: A strong recovery in UK economic data could lead to renewed interest in the GBP.
• Downside risk: Further political instability in the UK could exacerbate the Pound's decline against the CLP.