DXY Edges Higher, But Still Heading for a Weekly Loss
The US dollar remains under pressure and is heading for a negative week, despite a slight gain on Friday. At around 8:15 a.m. Eastern Time, the Dollar Index (DXY) rose 0.1% to 96.915, but remains on track to lose around 0.6% for the week.
Bank of America Securities believes this weakening is not simply a factor in daily data, but rather a reflection of a shift in investor attitudes toward increasingly "lighter" USD holdings. They stated that the underweight position on the dollar is at a record level in the survey sample since 2012, while more market participants are choosing to increase their FX hedges or reduce exposure to US assets.
Interestingly, the easing of concerns about central bank independence (following the change in Fed leadership that is said to have eased market anxiety) has not automatically attracted dollar buying.
BofA emphasized that many survey responses were collected before the release of solid US jobs data, so short-term "tailwinds" for the dollar could still come from resilient US data and a repricing of Fed expectations—but for now, substantial investor flows remain defensive toward the USD.
Source: Newsmaker.id
