Fund managers are more bullish on the dollar than ever before, with a record number expecting the greenback to strengthen in the next 12 months, according to a new survey.
A monthly poll from Bank of America Merrill Lynch showed that a net 83 percent of fund managers worldwide expect the dollar to appreciate in the next 12 months. This is a new record, breaking a previous record set in March when 72 percent of respondents forecast the dollar would rise over the following year.
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In addition, BofA noted that equity investors were long in July on strong-dollar plays, such as U.S. and Japanese stocks, and short on weak-dollar plays, such as commodities and emerging market (EM) equities.
"The combination of a collapse in China growth expectations and record U.S. dollar bullishness sent EM equity exposure down to its lowest level in 12 years," said Michael Hartnett, chief investment strategist at BofA's global research division, in a report written after the poll.
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