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 has paused interest rate changes, while the People's Bank of China has recently cut rates, suggesting a divergence in monetary policy that may weigh on the GBP.
- Risk/commodities: Recent movements in global oil prices, which are climbing, can influence the GBP positively due to potential boosts in UK exports.
- One macro factor: The UK’s upcoming GDP figures may provide crucial insights, but mixed economic indicators leave uncertainty hanging over the pound.
Range:
Expect the GBP/CNY to drift within its recent stable range as external factors play a supporting role without definitive direction.
What could change it:
- Upside risk: A stronger-than-expected GDP growth report from the UK could boost the pound.
- Downside risk: Increased political instability or negative economic data could lead to a sharper decline in the GBP.