GBP/XOF Outlook: Slightly positive, but likely to move sideways, as the rate is above the 90-day average but lacks a strong driver.
Key drivers:
• Rate gap: The Bank of England maintains a cautious stance while the Bank of Central African States reassures about the CFA franc's stability, lending support to GBP against XOF.
• Risk/commodities: Global oil prices are relatively stable, which helps both currencies remain steady in broader trade contexts.
• One macro factor: Recent UK retail sales and PMI data surpassed expectations, boosting GBP, despite the uncertainty surrounding local elections.
Range: The GBP/XOF is likely to drift within its recent range as both currencies face limited volatility.
What could change it:
• Upside risk: A stronger than expected economic performance in the UK could push GBP higher.
• Downside risk: Political instability linked to upcoming elections in the UK may challenge GBP strength.
