This time, the USD's overvaluation is largest against the JPY, NOK, SEK and GBP. “EURUSD appears cheap, trading around one standard deviation below its FEER, while GBPUSD is also cheap, trading 14% below its FEER of 1.64,” says Sneyd.
A cheery note from BNP Paribas points out “the outlook for the GBP is positive, and we expect solid UK GDP and accelerating wage growth to prompt the BoE to deliver tightening sooner than the market expects.
Goldman Sachs analysts said in a note Thursday that a departure from the EU would “increase uncertainty, weigh on the U.K. outlook and raise concerns of foreign investors.” They suggested such a move could cause the pound to drop 15 percent to 20 ...
"This backdrop is likely to leave the GBP more reactive to external considerations than domestic ones, particularly as the UK economic data release calendar is relatively quiet over the next week or two.
The British Pound traded slightly lower versus other major currencies (at the time this report was written) after today's BoE rate decision saw interest rates unchanged at 0.50%, as was expected by economists.