SEB Research discusses its views on GBP and JPY. SEB targets USD/JPY at 111 and GBP/USD at 1.30 in 6 months.
"Time is running out and negotiations on a new trade deal with the EU has not moved forward since the COVID-19 outbreak in Feb. There are no signs the UK would opt for an extension of the withdrawal period to get more time and this will weigh on the GBP short-term. As one of few central banks the BOE has started to flirt with the possibility of moving into negative rates. Otherwise the GBP is already significantly undervalued and should recover as these risks fade," SEB notes.
"According to our fair value model the JPY is undervalued against the USD and it would be reasonable to see it strengthening now. However, its status as a defensive currency will attract capital outflows if the global situation continues to improve. Therefore, we expect it to follow the USD lower over the next 6-12 month," SEB adds.