The GBP to MXN exchange rate exhibits a range-bound bias. The interest rate differential remains significant, with the Bank of England potentially cutting rates while the Bank of Mexico holds steady. Global risk sentiment is also influencing movements, as the pound has shown mixed performance against risk-sensitive currencies. Additionally, the UK’s projected slow GDP growth and declining inflation contrast with Mexico's expected 1.3% growth, affecting the peso.
In the near term, GBP to MXN could trade within a stable range, maintaining proximity to recent levels while seeing minor fluctuations. An upside risk could arise from stronger-than-expected UK economic data, which might boost the pound against the peso. Conversely, a downside risk is present if geopolitical tensions escalate, potentially leading to a flight to safety and weighing on the pound's performance.
