GBP/CLP Outlook: Slightly weaker, but likely to move sideways, as the rate is below its recent average and within a stable range.
Key drivers:
• Rate gap: The Bank of England's cautious rate outlook contrasts with the Central Bank of Chile's recent rate cut, creating pressure on GBP.
• Risk/commodities: Rising copper prices, supported by demand from various sectors, bolster the CLP due to increased export revenues.
• One macro factor: The UK's projected GDP growth slowdown, impacted by stagnant household incomes and budget cuts, adds to the pressure on the GBP.
Range: The GBP/CLP is expected to drift within its recent stable range, not breaking significantly from the current position.
What could change it:
• Upside risk: A surprising rise in UK economic indicators could boost GBP demand.
• Downside risk: Further unexpected monetary easing from the Bank of England could weaken the GBP further against the CLP.