GBP/WST Outlook: Slightly positive, but likely to move sideways as the rate is above its recent average and lacks a clear driver.
Key drivers:
- Rate gap: The Bank of England's (BoE) cautious stance in maintaining interest rates contrasts with the Central Bank of Samoa's (CBS) focus on reducing excess liquidity, providing some support to the pound.
- Risk/commodities: Oil prices are currently stable, which may not have a direct impact on the GBP but does help maintain overall market stability.
- One macro factor: UK Retail Sales and PMI data have exceeded forecasts, leading to a positive outlook for economic resilience in the UK.
Range: GBP/WST is likely to drift within its recent range as it remains above its average, with no strong indicators prompting major movements.
What could change it:
- Upside risk: A significant increase in UK economic indicators could strengthen sterling further.
- Downside risk: Political uncertainty surrounding the upcoming local elections may create volatility in the pound.