GBP/TWD Outlook:
Slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear driver.
Key drivers:
• Rate gap: The Bank of England's dovish stance contrasts with Taiwan's Central Bank's non-intervention approach, affecting both currencies.
• Risk/commodities: The strong performance of the TWD amidst volatility in the export sector may provide support for the currency without directly benefiting the GBP.
• One macro factor: Ongoing UK political uncertainty has left GBP investors cautious, with movements expected to be limited until key economic data is released.
Range:
GBP/TWD is likely to drift within its recent range as external factors influence both currencies.
What could change it:
• Upside risk: A stronger-than-expected GDP report for the UK could boost the pound.
• Downside risk: Continued political instability in the UK might pressure GBP lower against a resilient TWD.