GBP/USD: the macro gap
On the Macro Currency Strength Meter, the British Pound scores -14 and the US Dollar scores +4 — a gap of 19 points in favour of the US Dollar. The widest divergence is in positioning, which favours the US Dollar. All else equal that gap is a fundamental tailwind for the US Dollar against the British Pound — though markets may already have priced much of it in.
Strength gap
-18.7
Stronger side
USD
Edge is
Narrowing
Scores
-14 vs +4
Factor by factor
Positive is stronger relative to the other majors, not in absolute terms. The gap column is GBP minus USD.
| Factor | GBP | USD | Gap |
|---|---|---|---|
| Interest Rates | -31 | +2 | -33.3 |
| Growth | — | +4 | -4.2 |
| Positioning | -6 | +31 | -37.1 |
| Risk Mood | +9 | -26 | +35.1 |
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