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Investing.com -- The Bank of England (BoE) is expected to maintain its Bank Rate at 4.25% during its June meeting, according to a forecast from Bank of America (BofA). The financial institution predicts a 7-2 vote split among Monetary Policy Committee members, with two members voting for a 25 basis point cut.
BofA notes that recent British pound (GBP) weakness stems from seasonal underperformance and softening macroeconomic data. Despite the currency’s recent price movements, BofA’s GBP dashboard does not indicate that markets are adopting an increasingly bearish stance toward the pound.
Market positioning remains a concern for the currency, along with the broader risk environment ahead of the July 9th tariff deadline. BofA analysts point out that the recalibration in BoE market pricing is now more aligned with their base case scenario.
The financial institution emphasizes that interest rates and carry have not been reliable indicators for GBP price movements. Instead, global risk dynamics will likely play a more dominant role in determining the currency’s performance.
BofA suggests that a dovish Monetary Policy Committee stance is perhaps the base case scenario, which creates some asymmetry for the pound. This outlook comes as markets continue to assess the central bank’s policy trajectory amid evolving economic conditions.
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