GBP/PHP shows a bullish-to-range-bound bias as it currently sits above the 90-day average and in the upper half of its 3-month range.
Key drivers:
- Rate gap: The Bank of England's cautious approach about further rate cuts contrasts with the Philippine central bank's plans for monetary easing in 2026, which supports the GBP.
- Risk/commodities: Oil prices are experiencing volatility, which may influence the peso due to its reliance on oil imports, potentially affecting its strength against the pound.
- One macro factor: The UK's projected GDP growth slowdown is creating a cautious backdrop for the GBP, amidst global trade dynamics and geopolitical tensions.
Range: Expect GBP/PHP to hold within its recent 3-month range, with potential for slight upward drift.
What could change it:
- Upside risk: A significant improvement in UK economic data could boost the pound.
- Downside risk: Further peso depreciation due to weak growth prospects or external economic pressures could weaken the GBP/PHP rate.