Bias: bullish-to-range-bound, as the GBP is slightly above the 90-day average and positioned in the upper half of its 3-month range.
Key drivers:
- Rate gap: The Bank of England is taking a cautious approach on rate cuts, while the National Bank of Poland remains hawkish due to inflation.
- Risk/commodities: Oil prices are fluctuating, impacting both the UK and Poland, potentially influencing the GBP's strength against risk-sensitive currencies like the PLN.
- Economic performance: Poland is expected to grow over 3.5% in 2026, which may support the zloty's position despite potential fiscal concerns.
Range: The GBP/PLN is likely to hold within the recent 3-month range, with minor fluctuations influenced by economic data and geopolitical factors.
What could change it:
- Upside risk: A stronger-than-expected UK economic data release could boost the GBP.
- Downside risk: Increased political instability in Poland could weaken the PLN and affect the GBP/PLN exchange rate negatively.