GBP: Market Still Short & Sterling Still Cheap – BNPP

BNP Paribas FX Strategy Research notes that that market positioning in the GBP appear to have been unwound somewhat following the announcement of a June UK general election.

Despite that, BNPP notes that market positioning remains significantly short GBP, which suggests that the risk of a rally on the back of further short covering remains intact.

Furthermore, BNPP medium-term macroeconomic forecasting model signals that GBP/USD remains cheap versus its projected fair value of 1.31.

GBP/USD is trading circa 1.2790 as of writing.

Source: BNP Paribas ResearchOriginal Article