GBP/USD Outlook:
Slightly positive, but likely to move sideways, as the GBP is above its recent average yet lacks a clear driver for a substantial rise.
Key drivers:
• The Bank of England is projected to follow a dovish policy, maintaining interest rates steady at 3.75%, which might weigh on GBP strength.
• Despite rising retail sales in the UK, ongoing political uncertainty could stifle confidence in the GBP.
• The recent positive jobs report for the US indicates a resilient labor market, which supports the USD and pressures GBP/USD.
Range:
Expect the GBP/USD to test its recent highs, but movement may remain restrained given the mixed signals on economic conditions.
What could change it:
• A stronger-than-expected UK GDP figure could boost bullish sentiment for the GBP.
• A significant shift in US labor market data or geopolitical tensions may result in a decline for the USD, impacting the GBP/USD exchange rate.