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Bank of America flags bearish shift in USD amid weak US labor data
The American currency knows no peace! At one moment it soars higher, at the next it dives lower again. How can one keep up with such dynamics and still stay in profit? Everywhere you look, bearish tendencies dominate the greenback.
In this environment, analysts at Bank of America note the formation of a bearish trend for the US dollar, which emerged after a sharp negative revision of US employment data.
The bank’s currency trend factor has turned bearish for USD, while option metrics indicate signals of a continued downward trend against the British pound, the Swedish krona, and the South African rand. Macroeconomic variables have also deteriorated slightly, reinforcing the bearish sentiment on the dollar.
Against this backdrop, Bank of America pointed out that currency investors had been massively opening short positions on USD ahead of the release of the US Consumer Price Index. At the same time, CPI figures generally matched analysts’ forecasts, and core inflation in the country remained moderate. In this situation, the bank expects the bearish trend for the American currency to continue.
The cost factor has also stayed bearish for the greenback, Bank of America highlights. Meanwhile, the Australian and New Zealand dollars currently appear undervalued. As for the Swiss franc, the bank considers it the most overvalued currency within the G10 group.
Published 21 August 2025
© InstaFintech Group
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© InstaFintech Group
