BofA Fund Manager Survey: Fund Managers most underweight US Dollars since 2006

• Fund Managers most underweight US Dollars since 2006.
• US-China trade war ceasefire prevents recession/credit event.
• Prior to US-China talks in Geneva, fund managers saw US tariffs on China goods at 37%.
• 61% of fund managers see soft landing for the economy versus 37% in April.
• 26% see hard landing, down from 49% in April.

We can see here that the “short US Dollar trade” has been (and I think it’s still is) a pretty overcrowded trade. I can see some more upside for the greenback in the next weeks but we might need strong economic data to make the market to price in an even less dovish path for interest rates.

Maybe an upside surprise in today’s US CPI report might do it.

This article was written by Giuseppe Dellamotta at www.forexlive.com.