Credit Agricole CIB Research discusses GBP outlook and maintains a bearish bias, expressing that via a short GBP/USD targeting a move towards 1.3250.
"On 6 May, local elections will be held across the UK and their outcome will be used to assess the damage done to the Tory party’s popularity from the latest controversies that surround the UK government and are centred on Prime Minister Boris Johnson. ..Indeed, the beleaguered Prime Minister may have to deal with returning support for Scottish independence especially if the SNP and its allies in Holyrood try to hold a referendum despite opposition from Westminster," CACIB notes.
"Growing political uncertainty could weigh on the GBP even if, as expected, the BoE upgrades its economic outlook and reduces the pace of its weekly asset purchases. In turn, this continues to warrant a cautious outlook on the GBP in the very near term. In our portfolio, we are short GBP/USD," CACIB adds.