The GBP/HKD outlook is bullish-to-range-bound, as the current rate is slightly above the 90-day average and within the upper half of the 3-month range.
Key drivers:
• The Bank of England is taking a cautious approach to rate cuts, with anticipated reductions which may affect the GBP's attractiveness.
• Oil prices are above average, reflecting strong demand, which generally supports the GBP by boosting market confidence.
• Ongoing geopolitical risks and trade tensions are influencing perceptions of the GBP, with a focus on their impact on UK economic growth projections.
Range: Expect the GBP/HKD to hold steady with potential to drift slightly within the recent 3-month range, as broader market trends shape movements.
What could change it:
• Upside risk: A significant improvement in UK economic data or positive resolution of geopolitical tensions could boost the GBP.
• Downside risk: Continued weakness in UK economic indicators or aggressive interest rate hikes by the US Federal Reserve could pressure the GBP against the HKD.