Hedge funds cut NFLX, keep big bets on MSFT, AMZN, add NVDA
Investing.com -- Bank of America (BofA) FX strategists took note a continuation of the trend with investors selling the USD, particularly against the Australian Dollar (AUD) and Asian emerging market currencies, following the recent U.S.-China talks.
Over the past month, BofA noted that investors have been selling the USD, Japanese Yen (JPY), and Swedish Krona (SEK) in favor of Eastern Europe, Middle East, and Africa (EMEA) emerging market currencies, the Swiss Franc (CHF), and the Euro (EUR).
Analysts at BofA highlighted the potential for the USD sell-off to persist, especially among Real Money investors. They pointed out that it will be crucial to observe if officials continue to rebalance into the USD at the current strong rate.
In contrast to the USD, the JPY has faced downward pressure in recent weeks, attributed to Real Money investors. The shift in sentiment towards the JPY could be due to improved tariff sentiments, concerns over Japan’s fiscal health, and the Bank of Japan’s (BoJ) dovish stance, as outlined in the "Yen’s summer risk" report from May 14, 2025. BofA maintains a bearish outlook on the JPY, particularly against the EUR.
Conversely, the British Pound (GBP) has seen relatively bearish sentiment throughout the year. However, last week marked a change, with both Hedge Funds and Real Money investors returning to the GBP. This shift may be linked to optimism surrounding the UK-EU reset summit, a sentiment that BofA analysts share.
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