PLN/GBP Outlook: Slightly weaker, but likely to move sideways, as the rate is below its recent average and near recent lows amid mixed signals.
Key drivers:
• Rate gap: The Polish central bank is cutting rates, reducing its carry advantage, which may weaken the PLN against the GBP.
• Risk/commodities: Recent trends show oil prices remain volatile, affecting global risk appetite and potentially impacting Sterling's performance.
• One macro factor: The UK's stronger-than-expected retail sales and PMI figures support GBP strength, even as inflationary pressures persist.
Range: Expect the PLN/GBP to hold steady within its recent range as both currencies react to domestic economic updates.
What could change it:
• Upside risk: A surprise hawkish shift in the Bank of England's policy could strengthen the GBP.
• Downside risk: Continued deterioration in Poland's trade balance may further pressure the PLN.