Bank of America Survey: Dollar Underweight Lowest Since 2012, 130K Job Gain May Spark Rebound
Bank of America’s February survey finds global U.S. dollar positioning at its lowest since January 2012, undercutting the April 2025 tariffs-shock record. Half of investors plan higher FX hedges or reduced U.S. exposure, while January’s 130,000 job gain and 4.3% unemployment may spur a dollar rebound.
1. Record Bearish Positioning
The February Bank of America Global Fund Manager Survey reveals that investors’ U.S. dollar positioning fell to its lowest level since January 2012, surpassing the underweight low recorded during April 2025’s tariffs shock. This marks the most bearish dollar stance in over 14 years.
2. Fed Independence and Dollar Demand
Concerns over Federal Reserve independence have eased following the nomination of a new Fed chief, yet this did not translate into renewed demand for the dollar or U.S. assets. Many investors remain cautious, maintaining underweight dollar exposures despite reduced policy risk.
3. Hedge Ratio and Asset Allocation Shifts
Approximately half of survey respondents plan to increase foreign exchange hedge ratios or actively reduce U.S. asset allocations, signaling ongoing skepticism towards the greenback. Expectations are growing that global reserve managers will further diversify away from dollar holdings.
4. Labor Market Data and Potential Rebound
Stronger-than-expected January jobs data—130,000 nonfarm payrolls added versus forecasts of 70,000 and a drop in unemployment to 4.3%—have led nearly half of respondents to view labor market resilience as a potential catalyst for a dollar rebound. Future economic releases will be closely watched for confirmation.