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2026-02-17 19:20:57
[Bank of America Survey: Pound Sterling Shifts from "Fair" to "Overvalued," Long Positions Spark Valuation Concerns] ⑴ A Bank of America global fund manager survey released Tuesday shows a shift in investor sentiment regarding the valuation of the pound sterling. A net 7% of respondents believe the pound is currently overvalued, whereas a month ago, the market generally considered its valuation fair. ⑵ This shift in sentiment stems primarily from the pound's recent strong performance. Since the UK budget in November, which exceeded expectations, investors have been reducing their large short positions in the pound, driving a sustained rebound in the exchange rate. ⑶ As the pound rises, market attention to its valuation level is increasing. The current survey results reflect that after a significant increase, some investors are beginning to worry that the pound's price has deviated from fundamentals. ⑷ The future direction of the pound will depend on the actual performance of the UK economy and market expectations for the Bank of England's policy path. Any data that falls short of expectations could trigger profit-taking by pound bulls.
