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Investing.com - Bank of America analysts identified room for further appreciation in the British pound and Australian dollar, according to a research note released Monday.
Hedge funds have been reducing their short positions against the pound following what Bank of America described as a "hawkish BoE cut" on August 7, 2025. Despite this reduction, overall positioning in the British pound remains somewhat short, with particular skepticism observed among asset managers.
The bank’s proprietary flow data and futures information both confirm this cautious stance toward sterling among institutional investors. Based on this positioning backdrop, Bank of America forecasts additional downside for the EUR/GBP currency pair.
The Australian dollar outlook has become "more constructive" according to the bank’s flow data, with both hedge funds and asset managers increasing their AUD exposure last week. While overall positioning in the Australian dollar is slightly long, Bank of America notes "ample space" remains for asset managers to increase their holdings.
Bank of America expressed a positive view on the Australian dollar ahead of the Reserve Bank of Australia meeting referenced in their August 7, 2025 preview, suggesting potential upside despite the already modestly long positioning in the currency.
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