Adam Cole, Global Head of FX Strategy at RBC Capital Markets, on Pound performance and forecasts

To my mind, the Sterling has been generally outperforming most of the majors in 2014 so far. Thus, we expect this trend to continue in the remainder of the year, but the pace of the Pound's gains to moderate as markets are already priced for fairly aggressive Bank of England tightening. 

In my view, the Scottish referendum in September is a key risk. Thereby, our main expectation is that Scotland will vote to remain as a part of the UK, and the Sterling will come through the process unscathed. However, if the opinion polls again start to show the gap is closing and the vote will be close, we expect the Pound to suffer. Moreover, other major risk is that the government uses "macro-prudential" measures to cool the housing market, and this takes the pressure off the Bank of England to raise rates.

We anticipate 0.81 for the EUR/GBP in the second quarter and 0.80 in the end of 2014. Speaking of the greenback, we expect 1.65 in the Q2 and 1.63 for the GBP/USD for the end of this year.