TD Securities Says Pound Rally vs Euro Looks Overextended

TD Securities' Macro Research team, led by Howard Du with contributions from Jayati Bharadwaj and Linda Cheng, has released a note arguing that the recent strength of the British pound against the euro has overshot its fair value.

The analysts suggest the rally looks stretched, implying that the current level of the EUR/GBP cross is unsustainable and a correction may be due. The assessment is based on short-term overvaluation signals rather than fundamental shifts in the UK or eurozone economies.

No specific targets or timeframes were provided in the brief, but the message is clear: the pound's recent gains against the euro may be running on borrowed time.