The GBP to AED market is currently range-bound.
Key drivers include the interest rate differential, as the Bank of England (BoE) is signaling a slower approach to future rate cuts, which may support the pound. Conversely, the UAE Central Bank is maintaining a positive growth forecast, projecting real GDP to rise significantly in 2026, bolstering the dirham's stability. The latest UK retail sales data could influence the pound's position if growth is confirmed.
In the near term, the GBP to AED rate is expected to remain within a stable range, fluctuating around the current price level.
Upside risks include unexpected robust economic data from the UK, potentially leading to a stronger pound. Downside risks involve the BoE announcing quicker rate cuts or negative impacts from UK fiscal policies that could dampen sentiment towards the pound.