AED/GBP Outlook: Slightly weaker, but likely to move sideways, as the rate is below its recent average and mid-range within its three-month range.
Key drivers:
• Rate gap: The UAE Central Bank's recent monetary measures support the Dirham, while the Bank of England maintains a cautious approach due to inflation concerns.
• Risk/commodities: Fluctuating oil prices, which remain a critical revenue source for the UAE, could influence the Dirham's stability as oil trends affect economic health.
• One macro factor: Recent stronger-than-expected UK retail sales and PMI figures provide some support for the Pound, though political uncertainty looms with upcoming elections.
Range: The AED/GBP exchange rate is expected to hold within recent levels, with no clear drivers pushing it towards extremes.
What could change it:
• Upside risk: An unexpected tightening of monetary policy by the Bank of England could boost the GBP.
• Downside risk: Continued political instability in the UK may lead to reduced confidence in the Pound.