According to BofA’s month-end fixing model, the dollar is the one favoured as we look to wrap up March and Q1 trading in the coming days. This fits with what was pointed out by both Credit Agricole and Barclays earlier here.
Of note, BofA says that:
“Our estimates suggest the potential for (1) material inflows into USD-denominated assets (c.+1.0σ) and to a lesser extend EUR assets (c.0.2σ), vs (2) outflows from JPY (c.-1.7σ), EM (c.-1.4σ) and GBP (c.-1.1σ) assets.”
The rebalancing against the yen and sterling fits with what Barclays was also arguing with their own model as well. So, that is something to take note of just in case.
However, BofA does point out that USD/CHF might be the biggest beneficiary in closing out the month:
“The direction of travel clearly suggests strong USD/CHF buying, driven primarily by the sharp drawdown in US equities. With bond returns also posting negative returns, we think this could be one of the larger USD/CHF buying months of the year. The signal has been consistent enough for us to have confidence in the direction of flows.”
The currency pair had a solid run higher last week, gaining 1.4% and is now trying to test resistance around the 0.8000 mark. However, the pair did break above its 200-day moving average at the end of last week. That sees it trade above both key daily moving averages for the first time since March 2025. So, that in itself could be an impetus for further upside potential in the pair.
