GBPUSD in line with short-term fair value - BNPP

Research Team at BNP Paribas, notes that the BNP Paribas STEER™ highlights that Cable is trading in line with short-term fair value of 1.3160 for the first time since Brexit.

Key Quotes

“The convergence between model fair value and spot has been driven by both a rise in the exchange rate a decline in the STEER™. The model appears to have been re-learning the new relationships between the GBPUSD and its short-term drivers, suggesting that relative 2y interest rates and global equities are the key drivers of the pair. We think rate spreads will move significantly against GBPUSD and remain short the pair targeting 1.2800, with our stop trailed to entry at 1.3350.”