Bank of America: Investors Currently View Shorting the Dollar as the Most Crowded Trade

According to a report by Jinse Finance, the July Global Fund Manager Survey by Bank of America shows that investors consider shorting the US dollar to be the most crowded trade at present, with about 34% of respondents holding this view. This marks the first time in the survey’s history that shorting the US dollar has overtaken going long on gold as the most crowded trade. Investors are most underweight on the US dollar, as well as on US equities, energy, and consumer staples sector stocks. The survey also reveals that 47% of investors believe the US dollar is overvalued, down from 61% in the June survey. Additionally, 14% of investors see a sharp drop in the US dollar due to capital outflows as the third largest tail risk (i.e., a low-probability event).