Gavekal Capital: British Pound Finally Overvalued Against The USD

Wednesday, March 5, 2014

British Pound Finally Overvalued Against The USD

For five years the British Pound was undervalued (and sometimes significantly undervalued) against the US Dollar on a purchasing power parity basis. The pound sterling has finally had a sustained period (over two months) of being slightly overvalued against the Dollar. PPP trends tend to last for quite a while so this may be the start of a multi-year period of relative strength of the pound versus the dollar.

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