Bank of America: The dollar loses momentum despite the strongest October in 10 years

The dollar has enjoyed a series of gains over the past three weeks and is on track to achieve its biggest October gains in more than a decade. However, analysts at Bank of America believe that the rally may be losing momentum.

In a note on Monday, Bank of America analysts stated, "We believe the US dollar’s rally has lost its strength and is beginning to fade."

Bank of America (BAC) added that the Dollar Index (DXY), which measures the US currency against a trade-weighted basket of six major currencies, has risen by approximately 2.5% in October, putting it on course for its best monthly performance since September 2022. Meanwhile, the dollar’s rise since the beginning of the month is set to deliver the highest October return for the DXY in more than a decade