GBP/USD shrugged off the triggering of Article 50 and despite sliding, has not collapsed nor seen the “short squeeze” envisaged by many. What’s next?
Here is their view, courtesy of eFXnews:
GBP: Still The Most Undervalued G10 Currency: A Buy Or Not? – Credit Agricole
Credit Agricole CIB Research argues that GBP outlook will likely remain driven by a tug of war between excessive FX undervaluation and Brexit-related economic underperformance
In that regard, CACIB argues that GBP is not a buy yet even as it remains the most undervalued currency in G10 according to CACIB long-term fair value model
“The currency is still quite undervalued but in itself this may not be enough for investors to go long. Subsequently, we continue to see GBP as staying not far from its recent multiyear lows against both EUR and USD,” CACIB argues.
GBP/USD is trading circa 1.2450 as of writing.
GBP/USD: No Material Breach Of 1.30 Or 1.20; Where To Target? – Credit Suisse
Credit Suisse FX Strategy Research struggles to see room for a material and sustained GBP/USD breach of 1.30, against what was already a tricky backdrop of Brexit negotiations, or a breach of 1.20 given the strong technical support around this level and the risk of a significant squeeze on the scale of short GBP positioning .
As such, CS prefers to run with a flat rather than negative forecasts profile for GBP/USD on a 12-month horizon.
CS now targets GBP/USD at 1.27 and targets EUR/GBP at 0.88 in 3-months.
GBP/USD is trading circa 1.2490, and EUR/GBP is trdaing circa 0.8640 as of writing.
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