GBP/CLP Outlook:
Bearish, as the rate is below its recent average and near recent lows with political uncertainties weighing heavily.
Key drivers:
• Rate gap: The Bank of England's dovish stance, keeping interest rates steady, contrasts with Chile's focus on economic growth with a lower policy rate.
• Risk/commodities: Ongoing global trade tensions have introduced volatility, influencing investor confidence in the Chilean peso.
• One macro factor: UK economic data is mixed, with GDP figures upcoming, potentially affecting the pound's movement.
Range:
Expect GBP/CLP to drift within its recent range, reflecting current low levels.
What could change it:
• Upside risk: A surprise improvement in the upcoming UK GDP figures could strengthen the pound.
• Downside risk: Continued political instability in the UK may further weaken investor confidence in the GBP.