GBP/OMR Outlook:
The GBP/OMR exchange rate is slightly weaker, but likely to move sideways as it trades near its recent average and within a stable range. Recent performance shows the pound is at 7-day lows, maintaining its position just above the 3-month average.
Key drivers:
• Rate gap: The Bank of England is cautious on interest rate changes, which contrasts with the relatively stable monetary policy of the Central Bank of Oman.
• Risk/commodities: Oil prices are currently above their average, which typically supports the value of the Omani Rial as it is highly correlated with oil revenues.
• Macro factor: Recent UK employment data shows rising unemployment and slowing wage growth, leading to speculation about a possible interest rate cut by the BoE.
Range:
Expect GBP/OMR to drift within its current range without testing extremes in the near term.
What could change it:
• Upside risk: A surprise increase in UK inflation could strengthen GBP against OMR.
• Downside risk: Further negative employment data may reinforce expectations of a BoE rate cut, leading to additional pressure on the pound.