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Feb 12 - 10:55 AM

GBP/USD: Further N-Term Gains In Doubt; Significant Downside Risk Ahead - Credit Agricole

By eFXdata  —  Feb 12 - 09:30 AM

Credit Agricole CIB Research flags a cautious bias on GBP in the near-term.

"The seemingly subtle differences between the BoE and the Fed have translated into a sizeable outperformance of the GBP vs the USD. While we believe that the BoE is done easing for now and have upgraded our GBP forecasts as a result, we nevertheless doubt that the recent gains can continue given the significant downside risks ahead – eg, the persistent post-Brexit uncertainty in the services sector and the prospect of a second independence referendum in Scotland," CACIB notes. 

"In the very near term, FX markets will focus on UK CPI, retail sales and PMI data as well as any evidence that the BoE would push back against the ‘hawkish’ market reaction to its more neutral message," CACIB adds. 

Source:
Crédit Agricole Research/Market Commentary

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