GBP/XCD Outlook:
Slightly positive, but likely to move sideways, as the rate is above its recent average without a strong driving factor.
Key drivers:
• Rate gap: The Bank of England's recent dovish stance contrasts with the East Caribbean Central Bank's long-standing stability, affecting GBP demand.
• Risk/commodities: Since oil prices are stabilizing, this could support the XCD due to its regional export reliance.
• One macro factor: Mixed economic indicators in the UK, including rising inflation and steady retail sales, suggest a cautious outlook for the pound.
Range:
GBP/XCD is likely to hold within its recent range, drifting rather than testing extremes.
What could change it:
• Upside risk: A surprise uptick in UK GDP could lift the pound.
• Downside risk: A stronger-than-expected call for monetary easing from the Bank of England could weigh on GBP.