GBP: Despite recent woes, GBP short-term fair value has improved vs EUR

While GBP has struggled lately, we note that its short term financial fair value has improved vs EUR over the past two weeks, by more than 1% . Similar dynamics were observed in EUR/USD, where its short-term fair value has declined lately, clearly pointing to EUR issues. With EUR/GBP no longer being meaningfully undervalued, this opens the door for further eventual declines in the cross towards our target of 0.8500. Short-term valuation is no longer a GBP headwind.