Bias: bullish-to-range-bound, GBP/TWD is above its 90-day average and sits in the upper half of the three-month range.
Key drivers:
- Rate gap: BoE’s gradual easing path contrasts with Taiwan’s cautious, non-intervention stance, keeping the policy gap modest.
- Macro factor: Taiwan's FX volatility remains a factor in 2026, encouraging hedging and potentially capping moves.
- Global risk appetite moves: flows can tilt toward GBP in risk-on periods, but gains are capped by the range.
Range: GBP/TWD is likely to drift toward the upper portion of its 3-month range, with occasional tests of the highs.
What could change it:
- Upside risk: stronger-than-expected UK inflation data delaying BoE rate cuts.
- Downside risk: renewed Taiwan FX volatility or unexpected policy shifts strengthening the TWD, pressuring GBP/TWD lower.