Investors Turn Record Bearish On The Dollar

Is This The Final Flush?

Published on Feb. 17, 2026

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Global investors are more bearish on the U.S. dollar than at any point in at least 14 years, according to a recent survey by Bank of America. The February survey reveals that USD positioning has fallen to the most underweight level in the bank's data set going back to January 2012, surpassing even the previous lows seen during the Trump tariff shock in April 2025.

Why it matters

The shift in investor sentiment towards the dollar is particularly striking given that concerns over Fed independence have abated following the nomination of a new Fed chief. However, this has not translated into greater demand for the dollar or renewed optimism on U.S. assets. Instead, investors remain skeptical and are looking to increase FX hedge ratios or actively reduce U.S. asset exposure.

The details

The survey data shows that global reserve managers are expected to continue reducing their dollar allocations, with a growing minority anticipating an accelerated pace of diversification. This has led to the dollar becoming a consensus underweight. Atlanta Fed President Raphael Bostic has warned that doubts about the U.S. dollar's confidence could create 'rippling in the valuation of the dollar'.

  • The February survey was conducted by Bank of America.
  • The previous lows in dollar underweight positioning were seen during the Trump tariff shock in April 2025.

The players

Bank of America

A major American multinational investment bank and financial services company.

Raphael Bostic

The president of the Federal Reserve Bank of Atlanta.

Ralf Preusser

A CFA charterholder who commented on the survey findings.

Claudio Irigoyen

An economist at Bank of America who provided an outlook on the U.S. dollar.

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What they’re saying

“Following the nomination of Warsh as the new Fed chief, worries regarding Fed independence has meaningfully abated. However, it did not translate into greater demand for the dollar nor renewed optimism on US assets.”

— Ralf Preusser, CFA (Benzinga)

“Despite uncertainty and policy changes, the relative outperformance of the US shows no signs of cracking.”

— Claudio Irigoyen, Economist, Bank of America (Benzinga)

“A significant real depreciation of the dollar, he argues, would amount to a recessionary shock for much of the world outside the United States.”

— Claudio Irigoyen, Economist, Bank of America (Benzinga)

What’s next

Most survey responses were collected before the latest stronger-than-expected U.S. jobs report, which could potentially act as a near-term catalyst for a dollar rebound.

The takeaway

While the U.S. dollar may soften further, there are structural limits to how far it can fall. The U.S. economy continues to outperform peers and maintain a productivity advantage, allowing it to sustain large fiscal deficits without losing its 'exorbitant privilege' of attracting global capital. A disorderly depreciation of the dollar is not in the interest of the U.S. or the rest of the world.