At 08:15 ET (13:15 GMT), the Dollar Index - which measures the U.S. dollar against a basket of six other major currencies - was trading 0.1% higher at 96.915. Despite the intraday uptick, the index was on course for a weekly decline of about 0.6%.
In a note dated Feb. 13, analysts at Bank of America Securities highlighted that the nomination of Kevin Warsh as the new Federal Reserve chief has substantially reduced concerns about the central bank's independence. However, the analysts added that easing of those worries has not resulted in stronger demand for the dollar nor in renewed optimism toward U.S. assets.
The bank's survey results show that investor exposure to the U.S. dollar has fallen below the levels recorded in April 2025 and reached lows not previously observed within BofA's sampling period, which begins in January 2012. In addition, the survey indicated that a majority of respondents prefer either to raise their foreign exchange hedge ratios or to reduce their overall exposures to U.S. assets.
Bank of America also reported a strengthening belief among respondents that reserve managers will continue to cut their holdings of U.S. dollars. A larger share of those surveyed now expect an increased pace of rebalancing away from dollar holdings.
The bank cautioned that most survey responses were collected before the publication of a recent positive U.S. jobs report. That report could alleviate some of the prevailing bearish sentiment toward the dollar, the note said, since near-term support for the currency is most likely to come from U.S. data resilience and any Fed repricing that follows stronger economic signals.
Contextual implications
While the nomination of a new Fed chief has eased institutional concerns about central bank independence, that relief has not yet prompted a reversal in investor positioning. The data show a clear preference among many investors for reducing direct dollar exposure or increasing currency hedges, and reserve managers in particular appear to be leaning into a continued reduction of dollar allocations.
The timing of the survey relative to the recent jobs release is an important caveat: market participants may update their allocations as fresh U.S. economic data feeds into Fed policy expectations.