GBP/USD: the macro gap
On the Macro Currency Strength Meter, the British Pound scores -18 and the US Dollar scores +2 — a gap of 20 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
-19.8
Stronger side
USD
Edge is
Widening
Scores
-18 vs +2
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 | -33 | -28 | -5.4 |
| Growth | — | +30 | -29.7 |
| Positioning | -12 | +35 | -47.2 |
| Risk Mood | +6 | -19 | +25.2 |
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