The market for the GBP to XCD exchange rate is currently range-bound.
Interest rate forecasts indicate that the Bank of England may lower rates to stimulate growth, while the East Caribbean Dollar remains stable due to its fixed exchange rate with the USD. Recent inflation trends suggest the UK could see reduced inflation by 2026, supporting the potential for rate cuts. Meanwhile, the XCD's stability is reinforced by debt management strategies within the Eastern Caribbean Currency Union.
Near-term trading is expected to remain within a narrow range, sitting just above its three-month average.
An upside risk could emerge if the UK economy outperforms expectations, while a downside risk may be linked to increased global economic pressures or renewed fiscal concerns affecting the UK economy, potentially leading to more significant rate cuts.