Bank of America Warns US Dollar Is Summer’s Biggest Pain Trade

Bank of America's latest fund manager survey reveals a dramatic shift in institutional sentiment toward the US dollar. Professional investors are now the most underweight the dollar since January 2005, with analysts labeling it the "biggest summer pain trade" as global recession risks ease.

The June 2025 survey shows fund managers controlling £523bn in assets are abandoning the dollar at unprecedented levels. This exodus reflects growing concerns about America's fiscal position and an improving outlook for international equities.

Recession expectations have fallen sharply from 42% in April to just 36%, further weakening safe-haven demand for the greenback. The dollar's decline coincides with surging soft-landing expectations, creating what Bank of America describes as "extreme positioning levels" in currency markets.