Credit Agricole CIB FX Strategy Research notes that the GBP has been capped, mainly on the back of rising Brexit-related uncertainty politics.
"Nevertheless, for now well supported central bank monetary policy expectations should put a floor below the currency. We stay of the view that the BoE will tighten monetary policy as part of next month’s policy meeting. We believe that BoE Governor Carney, who will testify on monetary policy later today, will keep such prospects alive," CACIB argues.
Just like the GBP, CACIB notes that the EUR has also come under some pressure as of late.
"With the central bank on track with announcing details on tapering in November, we see limited scope of the EUR facing bigger downside risks. As such we stay in favour of buying EUR dips, for instance against the USD and CHF," CACIB adds.
CACIB remains long EUR/USD* and EUR/CHF* targeting 1.22, and 1.18 respectively.