The GBP to HKD exchange rate currently holds a bearish bias.
Key drivers include the interest rate differential, where the Bank of England signals cautious cuts to its rate against Hong Kong's near-zero rates due to the currency peg. Additionally, UK economic growth is projected to slow significantly, negatively impacting the pound. Geopolitical tensions have also created a favorable climate for safe-haven assets, pressuring GBP further.
Over the next 1–3 months, GBP to HKD may trade within a relatively narrow range, given current stability.
Upside risks may stem from unexpected UK economic data that suggests resilience. Conversely, continued interventions by the Hong Kong Monetary Authority to maintain the currency peg could put additional downward pressure on the HKD, potentially exacerbating GBP weakness. Recent trading activity has seen GBP to HKD at 14-day lows near 10.44, only slightly higher than the 3-month average of 10.35, indicating a subdued market environment.