Bias: range-bound, current level sits near the upper end of the 3-month range, and the signal from the 90-day average is unclear.
Key drivers:
- Rate gap: BoE remains cautious on cuts with a plan for possible easing in 2026, while the HKMA keeps defending the HKD peg, widening the policy gap.
- Risk appetite: firmer global appetite tends to support GBP versus the HKD, which is more sensitive to USD moves.
- Macro: UK inflation is expected to ease toward the BoE target later in 2026.
Range: GBP/HKD is likely to hover near the upper end of its 3-month range, with a gentle drift toward the middle if risk appetite shifts.
What could change it:
- Upside risk: stronger-than-expected UK data or a hawkish BoE stance that delays further easing.
- Downside risk: renewed HKMA intervention to defend the peg or a sustained USD rally pushing HKD weaker.