GBP/USD Outlook:
The GBP/USD is currently slightly positive and likely to move sideways, trading just above its recent average but lacking a clear driver for significant movement.
Key drivers:
- Rate gap: The Bank of England's cautious stance on interest rates contrasts with the U.S. Federal Reserve's more aggressive cuts, which supports the pound.
- Risk/commodities: Recent US dollar weakness, driven by political changes and disappointing GDP figures, eases pressure on the GBP.
- One macro factor: UK economic data has been robust, with impressive PMI and retail sales figures boosting the pound's outlook.
Range:
Expect the GBP/USD to drift within its recent range, maintaining stability without testing either extreme.
What could change it:
- Upside risk: A strong hawkish signal from the Bank of England could enhance GBP strength.
- Downside risk: A further deterioration in U.S. economic indicators could unexpectedly strengthen the dollar, impacting GBP value.