HKD/GBP Outlook:
Slightly weaker, but likely to move sideways, as the rate is below its recent average and lacks a clear driver.
Key drivers:
• Rate gap: The Hong Kong Monetary Authority (HKMA) has supported the HKD through interventions, while the Bank of England's cautious position has weighed on the GBP.
• Risk/commodities: Oil prices have held steady, limiting any significant impact on the HKD, keeping its fluctuations moderate.
• One macro factor: The Bank of England held rates steady, with market expectations indicating potential cuts, contributing to the GBP's weakness.
Range:
HKD/GBP is expected to drift within its recent range, reflecting limited movement as both currencies face respective pressures.
What could change it:
• Upside risk: A shift in UK economic indicators favoring stronger trade or growth could boost the GBP against the HKD.
• Downside risk: Further interventions by the HKMA to stabilize the HKD could reinforce its position against a weaker GBP.