GBP/CLP Outlook:
The GBP/CLP is likely to decrease as the rate is currently below its recent average and near recent lows. Pressures on the British Pound continue from expected interest rate cuts by the Bank of England.
Key drivers:
• Rate gap: The Bank of England's cautious approach contrasts with speculation surrounding U.S. Federal Reserve rate cuts, impacting the GBP negatively.
• Risk/commodities: Ongoing volatility in global markets, driven by geopolitical tensions, is leading investors to seek safer assets, exerting downward pressure on the GBP.
• One macro factor: Chile's inflation exceeding expectations raises concerns about potential adjustments in Chile's monetary policy, adding to the pressure on the CLP.
Range:
The GBP/CLP is expected to drift within its recent range, maintaining stability between approximately 1164 and 1237.
What could change it:
• Upside risk: A stronger-than-expected economic recovery in the UK could lead markets to reassess interest rate expectations.
• Downside risk: Continued negative economic data from the UK may reinforce bets for further Bank of England rate cuts, pushing the rate lower.