GBP/USD Valuation Gaps Soar to 11%

The Pound to Dollar exchange rate has recovered to around 1.3512 after falling as low as 1.3475 during the past 48 hours.

UBS valuation models place purchasing-power parity at 1.48 and TEEER fair value at 1.50, implying a valuation gap of approximately 9.5% and 11% against the current market rate near 1.3512.

The Pound Sterling remains about 0.3% below its opening level on the chart.

UBS uses producer-price data stretching back to 1982, comparing how producer prices develop in the currency areas with movements in their exchange rates to determine purchasing power parity (PPP).