Credit Agricole CIB Research adopts a bearish bias on GBP/USD and likes short exposure in spot targeting a move towards 1.3450.
"We see several main reasons for GBP/USD to underperform in the coming months. The first is the pair’s overvaluation relative to its fair value of 1.3450. The second is the UK rollout is expected to slow down in April and May and thus erode the GBP’s advantage, especially vs the USD," CACIB notes.
"Our analysis suggests that GBP/USD is among the most vulnerable G10 FX pairs to the twin risks of elevated UST yields and risk aversion," CACIB adds.