Sterling Unvalued by PPP??

Discussion in 'Wall St. News' started by blueraincap, Jul 2, 2020.

  1. I haven't done any calculation, but from a typical consumer perspective, I don't think the UK consumer basket at 1.25gbpusd is cheaper than that of the US.

    https://www.cnbc.com/2020/07/02/ubs...recovery-despite-gloomy-economic-outlook.html

    UBS believes that sterling is second only to the Japanese yen among G-10 currencies in terms of undervaluation relative to the dollar, with strategists estimating its purchasing power parity (PPP) with the greenback is 1.54, against a current exchange rate of 1.25. PPP uses the prices of particular goods to compare the absolute purchasing power of currencies in various countries.