BofA Survey: US Dollar Positioning Hits Record Lows Since 2012

According to the latest survey by Bank of America, investor positioning in the US dollar has plummeted to its most negative level since at least January 2012. The report highlights that short positioning has now exceeded the bearish extremes witnessed last April, signaling a decisive shift in institutional sentiment. This downturn is primarily driven by concerns over a cooling US labor market, which respondents identified as the leading downside risk for the currency. Market participants are increasingly pricing in potential Federal Reserve (Fed) easing, even as concerns regarding central bank independence have softened recently. The record underweight status reflects a broad consensus that economic softness will continue to weigh on the greenback's performance. While such extreme positioning can sometimes serve as a contrarian indicator for a potential bounce, the fundamental focus remains firmly on macro-economic headwinds.