GBP: CBA strategist says 'a lot of strength to come' for 'undervalued' currency
The pound was the best performing major currency at the start of this week as the United Kingdom and European announced a breakthrough in Brexit negotiations. Pound soared on dollar hitting a new $1.40 high shortly after a last-minute joint press conference with David Davis and Michel Barnier. CBA senior strategist Peter Kinsella claimed the latest Brexit talks development could strengthen the pound towards further appreciation. He said: "I think the Pound still has a lot of strength to come.
BLOOMBERG•GETTY Pound today: Peter Kinsella suggested the the pound-USD exchange rate could improve
"I’ve been saying that for quite some time and I think it will continue to be the case." Mr Kinsella added that Brexit-related uncertainty had pulled down the value of the Pound but suggested the currency could improve to new highs as the future becomes clearer. Talking to Bloomberg, he continued: "I think sterling is deeply, deeply undervalued. Probably one of the most deeply undervalued currencies. It rallied a lot but it fell a lot from where it was. "Given where the dollar is in a trade sense, fair value is $1.55 but I think it’s undervalued because of Brexit-related uncertainty.
I think the pound still has a lot of strength to come Peter Kinsella