GBP/CNY Outlook:
Slightly positive, but likely to move sideways, as the rate is near its recent average and lacks a clear driver.
Key drivers:
• Rate gap: The Bank of England's recent dovish stance contrasts with the People's Bank of China's easing measures, putting pressure on the GBP against the CNY.
• Risk/commodities: Recent gains in commodity prices may support a stronger CNY due to China's heavy reliance on imports, which can affect the GBP/CNY exchange rate.
• One macro factor: UK political uncertainty remains a concern, particularly regarding leadership questions in the Labour Party, which may hinder the GBP's strength.
Range:
Expect the GBP/CNY to hold steady within its recent range, as recent movements have been stable.
What could change it:
• Upside risk: A surprising increase in UK GDP data could improve the GBP outlook significantly.
• Downside risk: Continued political instability in the UK might lead to further declines in the GBP.