Institutional investors are pulling back from US equities and the dollar in record numbers, as President Trump’s aggressive tariff policies send shockwaves through global markets and push growth expectations to a 30-year low.
According to the latest Bank of America survey of top fund managers, investors are adopting their most bearish stance on the dollar in nearly two decades. The poll, conducted between April 4 and 10, surveyed 164 institutional investors managing a combined $386 billion in assets. It paints a stark picture of the shifting sentiment as capital flees riskier US assets and pours into safe havens like gold and government bonds.
A net 61 per cent of respondents expect the dollar to weaken over the next year—the highest proportion since May 2006—while more than two thirds view it as overvalued. The greenback, typically a magnet for inflows during times of market turmoil, has defied conventional patterns and dropped nearly 10 per cent from its January peak on a trade-weighted basis.
Wednesday saw the dollar fall a further 0.6 per cent after Trump announced a 145 per cent tariff on Chinese imports, while offering a 90-day delay on reciprocal tariffs for over 70 other nations. The pound climbed 0.3 per cent against the dollar to reach $1.33.
David Folkerts-Landau, group chief economist at Deutsche Bank, warned: “The world is facing a dollar confidence crisis. This potentially marks the largest shock to the world’s financial and trading system since the collapse of Bretton Woods in 1971.”
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