GBP/TWD Outlook:
Slightly weaker, but likely to move sideways as GBP is currently trading near its recent average and near 30-day lows. While the markets remain cautious about political risks, positive economic indicators offer some support to the Pound.
Key drivers:
• Rate gap: The Bank of England's cautious monetary policy contrasts sharply with the stable position of Taiwan's central bank, which is expected to keep rates unchanged.
• Risk/commodities: Global economic uncertainties and geopolitical tensions have increased risk aversion, impacting how traders view both GBP and TWD.
• One macro factor: Recent UK economic data has shown some improvement, which may provide temporary support for GBP, but concerns over potential political ramifications linger.
Range:
GBP/TWD is likely to drift within its recent range, fluctuating without substantial momentum to reach extremes.
What could change it:
• Upside risk: If the UK’s upcoming distributive trends index indicates strong retail activity, it could bolster GBP.
• Downside risk: Any negative developments regarding the by-election or further geopolitical tensions could pressure GBP further.
