USD investor flows turned destructive final week, BofA says

Investing.com — Investor flows for the US greenback turned destructive final week, reflecting shifts in market sentiment and positioning, in line with Financial institution of America.

Regardless of assist from company demand, the USD skilled Actual Cash-led provide pressures, which outpaced heavier Hedge Fund positioning in favor of the forex, in line with the financial institution.

This development is alleged to align with the latest weak point in USD value motion.

“USD might have softened extra with out month-end company demand,” BofA famous.

Inside the G10 currencies, BofA says the Swiss franc (CHF) emerged as a standout, supported by each Hedge Funds and Actual Cash traders.

BofA attributes this demand partly to “rising issues round France,” the place dangers have been drawing market consideration. This enhance in CHF positioning comes regardless of the forex’s total quick stance amongst traders, suggesting a cautious pivot amid geopolitical and regional uncertainty.

Elsewhere, BofA stated internet choices exercise final week added stress to the euro-yen (EUR-JPY) pair.

Whereas JPY noticed sturdy demand in choices markets, the euro continued to face provide pressures. “We forecast extra EUR-JPY draw back within the subsequent months,” BofA analysts stated. They famous the continued dynamic and muted demand for USD in choices markets.

Regardless of the broader outflows, BofA highlighted that the USD has lately benefited from accelerating US fairness flows by foreign-based traders.

This development underscores the complexity of the USD’s positioning because it continues to navigate contrasting forces from investor demand throughout asset courses and areas.