A quick scan across various forecasts for the GBP
Goldman Sachs see it under $1.20
- Goldman's 3 mth target is 1.20 (they reiterated the call again Tuesday)
- Says its own model points to GBP as being cheap , BUT it does not account for big structural shifts such as Brexit
- Sterling "is not yet cheap"
- Trade-weighted pound still about 10% overvalued "if a smaller current account deficit is
Societe Generale
- Do not rule out lower to $1.15
- But if it get there it's a buy
- For now though, looking to sell rallies
- Says concerns over the UK current account could see GBP lower
- Upside is a potential if there is a "complete reversal of position from politicians on the current 'hard Brexit' stance"
BNP, on the other hand
- Saying that GBP is significantly undervalued
- Its model is pointing to a target above $1.29 (and against the EUR around 87 pence)
- Data and news flow likely to "remain challenging"
- But market is very short, short positioning is stretched
- Looking for squeeze higher on any better surprises
