GBP/XOF Outlook: Slightly positive, but likely to move sideways, as the rate remains above its recent average without strong drivers to propel it higher.
Key drivers:
• The Bank of England's cautious approach hints at potential rate cuts, which can weigh on the GBP's strength against the XOF.
• Oil prices, which are currently volatile, could impact the UK's economic outlook and subsequently the GBP, as energy costs influence inflation.
• Falling foreign reserves have prompted the BEAC to tighten monetary policy, providing some support to the XOF.
Range: The GBP/XOF is likely to hold steady within its recent range as external pressures balance with current policies.
What could change it:
• Upside risk: A rebound in the UK economy could inspire confidence in the GBP, leading to an increase in value against the XOF.
• Downside risk: Further developments regarding US tariffs could negatively impact the GBP, pressuring it against the XOF.
