The market bias for the GBP to XCD exchange rate is range-bound.
Key drivers include:
- The anticipated interest rate cuts by the Bank of England (BoE) could weaken the GBP as it aims to address slowing inflation and growth.
- The East Caribbean Dollar (XCD) remains stable with its fixed exchange rate to the USD at 1 USD = 2.7 XCD, which supports consistent value for XCD.
- Economic growth in the UK is projected to decelerate to 1.2% in 2026, impacting GBP performance against the XCD.
In the near term, GBP-XCD is expected to trade within a stable range. The current rate of 3.6484 is notably above its three-month average, showing a slight bullish tendency.
Potential changes could arise if the BoE signals stronger rate cuts than expected (an upside risk) or if significant economic challenges emerge in the UK disrupting growth further (a downside risk).