TD Securities: GBP Bearish vs EUR on Hawkish ECB Guidance

TD Securities strategists have expressed a bearish view on the British Pound (GBP) versus the Euro (EUR). They highlight asymmetric downside risks for GBP, arguing that EUR/GBP appears notably undervalued when compared to current rate differentials, data surprises, and equity performance.

The team points to hawkish guidance from the European Central Bank as a key driver behind their outlook. While no specific targets or timeframes are given, the note suggests that the current undervaluation of the euro against the pound may correct, weighing on sterling.