Credit Agricole CIB Research adopts a cautious bias on GBP in the near-term.
"we are sceptical that the GBP could struggle to extend its recent gains on a sustained basis. A more cautious view is further warranted ahead of this week’s CPI, retail sales and PMI data as well as speeches by a number of BoE policymakers.
"In particular, the data releases could determine whether the BoE will need to cut rates at its February meeting or not. The January PMI data in particular could show the economic strains from the fresh lockdown measures introduced last week. In addition, we worry that the PMIs could also suffer as the support from the precautionary business stockpiling ahead of Brexit starts to fade. All in all, we expect data disappointments this week to weigh on the GBP once again," CACIB adds.