Goldman Sachs: The pound is currently the most overvalued currency among the G10

Since the sharp fall after Brexit, the British pound has rebounded all the way and has now become the most overvalued currency among major developed currencies. London strategist Stuart Jenkins wrote in a client report that the pound has deviated from fundamentals, stating, "The Brexit factor may have lowered the fair value of the pound by about 6%." After a significant rebound in the real exchange rate, "the pound is now the most overvalued currency within the G10." Since the UK officially left the European Union in 2020, the pound has risen about 1.5% against the US dollar, but it is still about 10% lower than its pre-referendum level. As most of the discount has been erased, some analysts believe there is limited room for further appreciation of the pound.