GBP Gains Ground vs USD Amid Brexit Uncertainty

The British Pound (GBP) has gained ground against the US Dollar (USD), trading around $1.3499 after a 1.75% rise in July.

According to foreign exchange analysts at QCAM Currency Asset Management, the Pound is undervalued by around 12% on long-run valuation measures, suggesting that it could be due for a rebound.

However, QCAM's analysis also highlights the challenges facing the UK economy, particularly in relation to Brexit. The firm notes that the UK's external position remains strained, with twin deficits and a negative net international investment position.

Despite this, QCAM sees some positive signs for Sterling, including improved business sentiment and technical signals. The firm also notes that speculative positioning is currently short on GBP, leaving room for a potential squeeze if risk appetite improves.