GBP/USD Outlook:
Slightly positive, but likely to move sideways as the rate is above its recent average and lacks a clear driver.
Key drivers:
- The Bank of England recently maintained its interest rate, signaling a cautious policy approach compared to the U.S. Federal Reserve's steadiness.
- Political uncertainty in the UK is contributing to caution among traders, impacting the pound's stability against the dollar.
- Economic indicators are mixed, with recent retail sales growth overshadowed by slowing services activity and rising inflation.
Range:
The GBP/USD pair is likely to drift within its recent range without testing its extremes, maintaining stability around current levels.
What could change it:
- Upside risk: A more optimistic outlook from the Bank of England may boost the pound if it hints at potential rate hikes in the future.
- Downside risk: Any worsening of political uncertainty or a downgrade in economic outlook could lead to further pressure on the pound.
