The US dollar saw its strongest investor demand this year last week, according to Bank of America Group data released Monday.
Hedge funds and asset managers drove the surge in dollar buying, with Bank of America Group indicating in its analysis that developments in Japan and France likely heightened concerns about short dollar positions.
The report explained that hedge funds primarily bought the dollar against the Japanese yen, the Australian dollar, and emerging market currencies, while asset managers focused on buying the dollar against the euro.
The data showed that investors also supported the US dollar in options markets, primarily against the euro and emerging market currencies, indicating broad-based demand for the dollar.
Bank of America Group analysts noted that the dollar's strength could have extended further were it not for supply from institutional and official sources, which helped mitigate the currency's gains during this period
