GBP/AED Outlook:
The GBP/AED rate is slightly positive and likely to move sideways. The current position is just above the recent average but lacks a clear driver to push significantly higher or lower.
Key drivers:
- Rate gap: The Bank of England's steady interest rates contrast with the UAE Central Bank's recent cut, which helps the AED maintain stability.
- Risk/commodities: Oil prices have been volatile recently, with fluctuations affecting market confidence and in turn the value of GBP against the AED.
- One macro factor: UK GDP growth continues to be upbeat, supported by strong retail sales and PMI data, reinforcing confidence in the pound.
Range:
GBP/AED is expected to drift within its 3-month range, maintaining stable levels without extreme fluctuations.
What could change it:
- Upside risk: Stronger-than-expected UK economic data could enhance demand for the GBP.
- Downside risk: Growing geopolitical tensions could increase risk aversion, negatively impacting the pound.