GBP/TRY Outlook:
Slightly positive, but likely to move sideways as the rate is above its recent average yet lacks a clear driver.
Key drivers:
• Rate gap: The Bank of England's cautious policy contrasts with the Central Bank of Turkey's recent interest rate cuts, creating pressure on the lira.
• Risk/commodities: Recent volatility in oil prices may affect the Turkish economy, generally impacting the lira's stability.
• One macro factor: Fitch's upgrade of Turkey's outlook to positive suggests improving conditions, but the lira still faces challenges managing depreciation.
Range:
The GBP/TRY is likely to hold within its recent range, occasionally testing the extremes based on emerging news.
What could change it:
• Upside risk: A stronger-than-expected UK GDP report could boost the pound's value.
• Downside risk: Continued weakness in the lira, especially if inflation remains uncontrolled, could further pressure the exchange rate.