The market is betting on the Bank of England to cut interest rates at the end of the summer, and the future trend of the pound and the US dollar is not yet clear

The current money market pricing and short-term trading signals suggest that the idea that the Bank of England will cut interest rates for the first time at the end of summer seems to be a clear bet. According to the latest data from the US Commodity Futures Trading Commission, speculators have replenished their GBP positions, with the so-called net long position rising to its highest level on record. Morgan Stanley’s chief UK economist Bruna Scarika believes that the lower-than-expected wage data released last week is the reason for the interest rate cut in May. Both Barclays and Capital Economics are betting on a rate cut in June. Rabobank strategists said traders were focused on hawkish comments from the Bank of England. Economists are questioning whether the central bank’s inflation forecasts are wrong again, and how quickly policymakers might turn dovish if the central bank’s expectations prove wrong. Regarding the GBPUSD trend, Kit Juckes, a foreign exchange strategist at Société Générale, said he was unsure whether the pound could remain strong against the US dollar due to stronger-than-expected latest US inflation data.