Bank Of America Warns Of Potential Risks For Dollar Bulls

According to Odaily, Bank of America has indicated that despite a narrowing interest rate differential between the U.S. dollar and most other global currencies, the dollar has continued to rise since the Federal Reserve's December meeting. This trend, occurring amid a one-sided market sentiment, could serve as a warning sign for dollar bulls. Bank of America's foreign exchange strategists Alex Cohen, Adarsh Sinha, and Janice Xue noted in a report on Tuesday that "despite the opposing trend in interest rate differentials, the dollar remains supported." They highlighted that crowded positions and increasingly uniform forex sentiment expose asymmetric risks.