Asset managers have turned neutral on GBP/USD, first time since 2014 - ING

Analysts at ING bank explained that fast-money investors (leveraged funds) have, as expected, slashed their net long GBP/USD positions in half over the past few weeks – as odds of a May Bank of England rate hike have receded and USD sentiment has recovered. 

Key Quotes:

"The most surprising element of the latest CFTC positioning data is that asset managers have turned neutral on GBP/USD for the first time since summer 2014."

 This suggests one of two things to us:

• Some institutional investors sniff a bullish opportunity with GBP/USD at these depressed levels and/or
• These group of investors overall no longer see scope for much further downside in GBP/USD. While the underlying breakdown shows tentative evidence for both factors at play, the former has greater substance given asset manager long GBP/USD positions increased from 13.6% to 21.6% (the highest since Dec 2008). A reassessment of UK political risks may be more of a driving force here for these medium-term investors, though we'll need to see whether this is more than just a quirk in the positioning data."