GBP/USD Outlook:
The GBP/USD is slightly positive, but likely to move sideways. The exchange rate is currently near its 3-month average, which provides no clear direction for major movement.
Key drivers:
• The Bank of England has kept interest rates steady, providing consistent support for the pound, while the U.S. Federal Reserve signals aggressive rate cuts.
• Recent uncertainties around U.S. tariffs have created a subdued environment for the dollar, impacting its demand amid trade concerns.
• UK retail data, particularly from the Confederation of British Industry, could strengthen the pound if positive trends are reported.
Range:
GBP/USD is likely to drift within its recent stable range, with no strong pressures to test extremes in the near term.
What could change it:
• An upside risk could emerge if UK economic data indicates stronger retail activity, boosting confidence in the pound.
• A downside risk exists if U.S. tariff measures are implemented more aggressively, adding pressure to the dollar and undermining the current balance.
