GBP/PKR Outlook:
The outlook for GBP/PKR is likely to move sideways, as the rate is near its recent average and exhibiting mixed signals. The ongoing absence of UK economic data and political uncertainties are contributing to this lack of direction.
Key drivers:
• Rate gap: The Bank of England's dovish stance on potential interest rate cuts contrasts with the relatively stable monetary policy in Pakistan.
• Risk/commodities: Global uncertainties, including geopolitical tensions, appear to have a limited impact on the stable performance of the PKR, backed by consistent remittances and export receipts.
• One macro factor: The upcoming by-election in the UK is creating uncertainty around the British Pound, raising concerns ahead of the vote.
Range:
GBP/PKR is expected to hold within its recent trading range, with stability seen around current levels.
What could change it:
• Upside risk: A significant shift in UK economic data or unexpected developments in monetary policy could strengthen the GBP.
• Downside risk: Heightened political instability or a significant dip in UK economic performance could pressure the GBP lower.
