Data from Bank of New York shows that the US dollar has dropped to a six-month low, which seems to be a buying opportunity for long-term investors.
This US-based company is one of the world’s largest custodian banks. Its tracking of capital flows shows that last week, institutional investors’ net inflow of US dollars reached the highest level since the beginning of this year.
As policy uncertainty in the world’s largest economy approaches its peak, investors have begun to question the safe-haven status of US assets, causing the dollar to plummet in recent days. On Wednesday, a dollar index continued its downward trend, hitting a six-month low, with speculative traders such as hedge funds and asset management companies driving the move.
Geoff Yu, a senior strategist at Bank of New York, said that its iFlow data shows that foreign institutional investors are buying the US dollar to reduce the hedges they have put in place to protect against a weaker dollar.
“In the market turmoil, investors have discovered the value of the US dollar,” he said. “Especially after the dollar’s decline, for those who have seen the dollar fall, there is no need to do so much hedging.”
The global trade war initiated by the United States has raised doubts about the status of the US dollar as the world’s reserve currency and led investors to sell off US Treasury bonds in favor of other safe assets such as German bonds.
Short-term speculators were the first to act. Data from the U.S. Commodity Futures Trading Commission (CFTC) shows that they turned bearish on the dollar after holding long positions for a week. The group currently holds the highest short position in the dollar since October 2024. As of the week ending April 8, the value of bearish positions on the dollar was approximately $4.3 billion.
Meanwhile, institutional investors seem to be adopting a more cautious strategy as they focus on longer-term returns. Data from State Street Global Markets shows that they did not reduce their holdings of the US dollar last week, despite their positions turning neutral for the first time in three years.
State Street’s data on capital flows also shows that demand for safe-haven currencies such as the Japanese yen and the Swiss franc against the US dollar has increased, while interest in high-risk currencies such as the British pound, the New Zealand dollar and the Swedish krona is waning.
Michael Metcalfe, head of macro strategy at State Street Global Markets, said: “The dollar has slipped in the ranking of safe-haven assets, but it has not yet fallen to the bottom of the ranking of risky assets.” However, “asset management companies have not yet reduced their holdings of the dollar overall, so by this indicator, the dollar has not yet been oversold.”
Technical analysis:
Gold: After breaking through the sideways range, the price has been rising all the way to the 3360 level. A relatively significant pullback occurred in the morning session. Subsequently, we will continue to attempt the long signal after the liquidity in the 3000-3010 area is cleared. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the chart, please contact V: Hana-fgfg.
Nasdaq: The price has broken below the yellow zone, swept through the liquidity, and then rebounded, which is consistent with our expected trend. Within the day, pay attention to whether the price can recapture the supply zone resistance at 18,500 – 18,600, and then try to catch the new demand zone signals. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the chart, please contact V: Hana-fgfg.
Crude oil: Due to Trump’s 90-day suspension of full reciprocal tariffs, the pressure on oil prices from recession concerns has been greatly alleviated. Yesterday, the yellow and blue momentum breakback and buy signals we reminded through the plugin performed well. After the price reached that area, a clear rebound trend emerged. Today, we continue to pay attention to the bullish signals of the price. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the picture, please contact V:Hana-fgfg.
Today’s key financial data and events to focus on:
14:00 German Producer Price Index for March
20:15 Eurozone ECB Refinancing Rate
20:30 U.S. Seasonally Adjusted Initial Jobless Claims (in thousands) (to 0412)
At 20:45, the President of the European Central Bank, Christine Lagarde, holds a press conference on monetary policy.
