GBP/AED Outlook:
The GBP/AED is likely to move sideways as the rate is near its recent average and within a stable range. Positive UK economic data is supporting the pound, while concerns over political events have created uncertainty.
Key drivers:
- Rate gap: The Bank of England has kept interest rates steady while concerns over inflation persist, which contributes to the pound's stability.
- Risk/commodities: Oil prices remain relatively stable, impacting investor confidence and the strength of the UAE Dirham indirectly.
- One macro factor: Recent positive trends in UK retail activity, if confirmed by upcoming reports, may bolster the pound further.
Range:
The GBP/AED is expected to hold within its recent range as there are no strong indicators for significant movement in either direction.
What could change it:
- Upside risk: A stronger-than-expected retail activity report could elevate the pound's strength.
- Downside risk: Increased geopolitical tensions may lead to greater risk aversion, lowering the pound's appeal.
