Analyst: The pound is still undervalued

On May 28, Monex Europe analyst Nick Rees said that the pound is still undervalued, especially against the euro, even after the recent appreciation. He said that interest rate differentials and growth differentials remain positive for the pound. The UK is also more resilient to US tariff risk than most other economies, including the eurozone. However, according to the London Stock Exchange Group (LSEG), the euro has risen 1.4% against the pound so far this year. "Based on macro fundamentals, it doesn't make sense to us," Rees said. He noted that risk aversion has depressed GBP valuations so far this year, driven by US tariffs, the political situation in the UK and the "general atmosphere" surrounding the UK economy.