GBP/MXN Outlook: Slightly positive, but likely to move sideways. The rate is near its recent average but lacks a clear driver to push significantly higher.
Key drivers:
• Rate gap: The Bank of England's cautious approach contrasts with the Banco de México's steady interest rate, maintaining the peso's appeal due to attractive yields.
• Risk/commodities: Higher oil prices, which benefit Mexico as a major oil exporter, provide support for the peso.
• One macro factor: Recent UK retail sales and PMI exceeding forecasts have contributed to a slight boost in the pound.
Range: GBP/MXN is likely to hold within its recent range, showing stability but limited movement in the near term.
What could change it:
• Upside risk: A stronger-than-expected economic performance in the UK could drive the pound higher.
• Downside risk: Increased political uncertainty within the UK could dampen investor confidence, weighing on the pound.
