Month-End Flows Point to Dollar Buying Into the Fix - BofA

Key Takeaways

• BofA forecasts +1.0σ USD inflows this month.
• EUR assets see modest +0.2σ inflows.
• JPY, EM, GBP face outflows of -1.7σ, -1.4σ, -1.1σ.
• USD/CHF up 1.4%, testing 0.8000 resistance.
• Pair broke 200‑day moving average, first since March 2025.

Pulse Analysis

Bank of America’s month‑end fixing model shows the U.S. dollar as the clear beneficiary as March and the first quarter close. The model predicts material inflows into USD‑denominated assets, roughly a one‑standard‑deviation boost, while euro‑zone assets see a modest uptick. This aligns with similar signals from Credit Agricole and Barclays, which also flagged dollar‑centric rebalancing at month‑end. Such consensus underscores the dollar’s safe‑haven appeal amid lingering market volatility. Investors therefore watch the dollar index for further confirmation.

The strongest intra‑currency move appears in USD/CHF, which rallied 1.4% last week and is probing the 0.8000 psychological barrier. Technical analysis shows the pair broke above its 200‑day moving average and key daily averages for the first time since March 2025, suggesting momentum could extend higher. BofA attributes the surge to a sharp drawdown in U.S. equities and negative bond returns, creating a flight‑to‑quality bias that favors the greenback against the franc. Liquidity remains ample, supporting continued price appreciation if sentiment stays negative on risk assets. If the trend persists, USD/CHF could become one of the year’s biggest buying months.

For investors, the dollar‑centric flow pattern signals a need to reassess currency exposure, especially in portfolios heavy on yen, emerging‑market, or sterling assets that BofA expects to see outflows. Hedging strategies using USD‑linked instruments may become more attractive as the greenback gains relative strength. Looking ahead to Q2, continued equity volatility and mixed bond performance could sustain demand for safe‑haven dollars, while any reversal in U.S. market sentiment might trigger a reallocation back into riskier currencies. Overall, the dollar’s dominance may shape cross‑asset allocations through the remainder of the year. Monitoring the evolving flow data will be crucial for timely positioning.