GBP/QAR Outlook:
The GBP/QAR exchange rate is currently trading near recent lows and just above its 3-month average, creating a slightly weaker but likely to move sideways outlook. Limited market drivers are contributing to this stability.
Key drivers:
• Rate gap: The Bank of England's cautious interest rate stance contrasts with the stable peg of the Qatari Riyal to the US dollar, influencing GBP pressure.
• Risk/commodities: Oil prices are trading near recent highs, which can lend some support to the Qatari Riyal as Qatar is a significant oil exporter.
• One macro factor: Recent UK employment data has raised concerns over economic performance, potentially impacting the Bank of England's future policy decisions.
Range:
The GBP/QAR exchange rate is likely to drift within its recent 5.7% range, showing no significant momentum for a breakout in either direction.
What could change it:
• Upside risk: A surprising increase in UK inflation could prompt the Bank of England to reconsider its rate outlook, supporting the GBP.
• Downside risk: Continued deterioration in employment data or a sharper-than-expected decline in inflation could weigh further on the GBP's value.