Bias: Bullish-to-range-bound, as the GBP is currently above the 90-day average and in the upper half of the 3-month range.
Key drivers:
• Rate gap: The Bank of England is cautious about rate cuts, while the Bangko Sentral ng Pilipinas is expected to ease its monetary policy in 2026.
• Risk/commodities: The Philippine peso has shown weakness, in part due to the global volatility in commodity prices, which affects its economic stability.
• One macro factor: The UK economy faces slowing GDP growth, influenced by stagnant household incomes and cuts in public spending.
Range: Movement for GBP/PHP is likely to hold, given the recent stability within its 3-month range.
What could change it:
• Upside risk: A stronger than expected UK economic recovery could boost the pound's value.
• Downside risk: Continued weakness in the Philippine economy could lead to further depreciation of the peso.