The dollar has been volatile in recent weeks and at one point reached multi-year lows, fueling talk of "Sell America" strategies and currency depreciation. Although this view is gaining popularity, BofA says that market data does not yet confirm a structural shift away from American assets.

BofA maintains a bearish long-term view on the dollar, but expects any weakening to be slow throughout 2026 and 2027.

Positioning and flow data show no signs that investors are withdrawing from American assets in a coordinated manner. The dollar risk premium has increased only slightly, and the options positioning indicates that the market is not significantly more short on the dollar than it was three months ago.

Intermarket flows tell a similar story. Inflows into stocks and bonds do not indicate that foreign investors are withdrawing capital from the United States en masse.

This year, there was only one day when both the dollar and American stocks experienced strong sales at the same time, which, according to BofA, does not correspond to the scenario of widespread depreciation.

Instead, a more likely response from global investors is currency hedging. European asset managers may increase the hedging of their American positions, which may gradually put pressure on the dollar without a sharp sell-off.

Macroeconomic signals also do not indicate growing depreciation risks. Inflation expectations remain stable, and fiscal concerns, although widely discussed, have not led to market stress indicating a loss of confidence in the currency.

Part of the expected decline in the dollar may be caused by the strengthening of other currencies. BofA sees several potential support factors for the euro, including improved eurozone growth later this year, fiscal stimulus in Germany, and the possible impact of Chinese stimulus. Structural factors such as defense spending and trade agreements may also support European assets over time.