GBP/PHP Outlook: Slightly positive, but likely to move sideways as the rate is near its 90-day average and lacks a clear driving force.
Key drivers:
• Rate gap: The Bank of England is expected to lower interest rates as inflation decreases, while the Bangko Sentral ng Pilipinas is hinting at potential rate cuts, affecting the peso negatively.
• Risk/commodities: Oil prices have shown signs of volatility, which can influence both currencies, but overall demand remains stable, offering mixed impacts.
• One macro factor: Geopolitical tensions, particularly related to the U.S. military's involvement in Venezuela, are causing uncertainty in emerging markets, including the Philippines.
Range: GBP/PHP is likely to hold its current position but could drift slightly within its recent range as neither currency shows strong momentum.
What could change it:
• Upside risk: A stronger-than-expected UK economic surprise could boost the pound's value.
• Downside risk: A significant decline in investor confidence in the peso could push the exchange rate lower.