Societe Generale Research discusses GBP outlook and sees a scope for GBP/USD to rise further, while stays cautious bias on EUR/GBP in the near-term.
"The morning G10 mover is sterling. The Conservatives did well I local elections, and the SNP (just) failed to win an outright majority in the Scottish parliament. However, the pound’s move is as much about the negative dollar toe and risk-friendly mood, as the news....don’t know anyone who thinks the risk of a second Scottish referendum has gone away," SocGen notes.
"GBP/USD can rise as the dollar remains under pressure from global economic optimism, but won’t chase EUR/GBP lower...Sterling does, if you work on the premise the UK continues to run slightly higher inflation that the Eurozone. And while the pound isn’t as expensive today as at past major turning points, it definitely isn’t cheap against the euro here. Wednesday brings a barrage of data including Q1 GDP and perhaps most important, March trade," SocGen adds.