The GBP/AED exchange rate presents a stable outlook, currently leaning slightly bullish. Key factors driving this sentiment include divergent monetary policies; the Bank of England is expected to cut interest rates, while the UAE's economic growth is forecasted to be strong, with 5.3% growth anticipated in 2026. The ongoing shift towards a digital currency in the UAE may foster further stability.
Within the near term, the GBP/AED rate is likely to remain within a stable range, trading slightly above its recent average. It has recently been priced at 4.9578, which is 1.4% higher than its three-month average.
Upside risks may emerge from better-than-expected economic data in the UK, strengthening the pound. Conversely, potential downside risks include deeper-than-anticipated cuts to UK interest rates or slower growth in the UAE's non-hydrocarbon sectors, impacting the AED's resilience.