Credit Agricole CIB Research maintains a constructive bias on GBP in the near-term, while stays cautious in the long-term
"The GBP remains the vaccine champion in the G10 FX space and this will remain an important support for the currency. More recently, the rates markets have been pricing out future BoE rate cuts after the MPC kept it policy unchanged in February while upgrading its inflation and growth projections. That said, there are a number of reasons to remain cautious on the GBP over the long term," CACIB notes.
"This week’s GDP, industrial and manufacturing output data would be a testament to the severity of the lockdowns on the UK economy. That said, the GBP could remain the only major currency that is able to hold its ground vs the USD even if the UK data triggers some volatility in the near-term," CACIB adds.