Credit Agricole CIB Research GBP/USD outlook and maintains a cautious bias in the near-term.

"GBP/USD continues to ride on the coattails of the recent USD underperformance in place since the announcement of the ceasefire between the US and Iran. At the same time, the GBP has struggled vs most other G10 currencies since the start of April. The mixed performance reflects the impact of: (1) fading GBP rate appeal after UK rates investors started paring back their BoE rate hike expectations in recent weeks; and (2) lingering market fears about the political future of the UK PM Keir Starmer that, in turn, fanned concerns about the UK government's commitment to fiscal discipline," CACIB notes.

"While UK political risks have started to fade again, global geopolitical risks and the BOE's relative policy outlook could remain important drivers of the GBP in the near term. Uncertainty about the conflict in the Middle East has been creeping back and could intensify further, in a blow to GBP/USD," CACIB adds.