The U.S. dollar saw its highest investor demand of the year last week, according to data from Bank of America released Monday, as geopolitical and economic concerns in Japan and France fueled a shift toward the safe-haven currency.
The move was largely driven by hedge funds and asset managers, with traders increasing long dollar positions amid growing unease over short bets.
Hedge funds concentrated their buying against the Japanese yen, Australian dollar, and several emerging market currencies, while asset managers focused on the euro, according to the bank’s report.
Investor appetite also extended into the options market, where demand for dollar exposure against the euro and emerging market currencies increased, underlining the breadth of the rally.
Bank of America analysts suggested that dollar gains might have been even stronger if not for selling pressure from corporate and official sources, which partially offset the surge in demand.
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