GSDEERGoldman Sachs Dynamic Equilibrium Exchange Rate
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I also developed what I called the Adjusted GSDEER, which corrects the "equilibrium" rate for the ongoing economic cycle, by accounting for factors such as the real interest-rate differential between the U.S.
Accordingly, the Adjusted GSDEER for the euro-dollar exchange rate, as of June 7, was 1 euro to $1.0590.
The GSDEERs current estimated equilibrium rate is 1.44/$1.63, and the FEERs is 0.88/0.74, which implies that the pound is now undervalued by anywhere from 14 percent to 24 percent against the dollar, and by as much as 20 percent against the euro relative to its notional fair value.