Bank of America Global Research maintains a bearish GBP bias through year-end, and likes to express that via short GBP/CHF (1.1830/1.14 GBP/CHF put spread in 1x2).
"We remain bearish GBP. 3Q/4Q a perfect storm. Seasonality to work against GBP into year-end. Weaker GBP against backdrop of high policy uncertainty. We make the case for lower GBP/CHF," BofA notes.
"Aug-Dec historically contain four negative months for GBP performance. But while the global backdrop will provide the day-to-day narrative for G10 FX more broadly, the pound's fortunes will increasingly be driven by the monetary policy stance, the ability of the economy to rebound from the global pandemic, and Brexit negotiations, which are effectively stuck in the mud. These form the pillars of our structurally bearish view and we take this opportunity to flag GBP/CHF as the preferred expression of that view," BofA adds.