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BofA: USD outlook turns bearish
The US dollar faces renewed pressure and gloom. Economists at BofA Global Research have reaffirmed their bearish outlook on the greenback. According to their observations, this perspective is becoming increasingly widespread across markets. The US dollar is experiencing tough times.
BofA analysts indicated that the bank continues to hold a bearish view on the dollar while also observing that this perspective is increasingly becoming a market consensus, which could carry certain risks.
While BofA expects the US dollar to weaken over the medium and long term, they do acknowledge several short-term factors that could temporarily support the currency. These include resilient US economic data, further easing of trade tensions, and fiscal compromises by Congress that could stabilize public finances.
Although these scenarios are plausible, they do not fundamentally change the overall bearish stance on the dollar. The analysts see persistent economic strength in US data as the most likely short-term catalyst for dollar gains. However, they also emphasize that the long-term effects of the US-driven global trade war will continue to weigh on the greenback over time. “We view the longer-term impacts of a US-induced global trade war as ultimately keeping the USD as the main relief valve for the economy, especially from a starting point of elevated valuations,” the analysts noted.
BofA concludes that any short-term dollar rallies are likely to be short-lived opportunities for selling unless major shifts occur in economic or poliсy conditions.
Published 11 June 2025
© InstaFintech Group
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© InstaFintech Group
