The GBP/WST outlook is range-bound as the exchange rate sits slightly below its 90-day average and toward the middle of its recent 3-month range.
Key drivers:
- The Bank of England's cautious approach to rate cuts may limit gains for the British Pound, which is expected to undergo slight reductions in the coming years.
- Recent trends in oil prices, currently below average, could negatively influence the UK economy, putting downward pressure on the GBP against less sensitive currencies like the WST.
- The Central Bank of Samoa’s policy to reduce excess liquidity aims to stabilize the economy, potentially providing support for the WST amidst economic growth forecasts.
Range: The GBP/WST is likely to hold within its recent range as both currencies face significant but contrasting economic conditions.
What could change it:
- Upside risk could arise if the Bank of England unexpectedly shifts its monetary policy or economic data surprises positively.
- Downside risk may occur if geopolitical tensions escalate or if the UK economy shows further signs of weakness.
