According to Bank of America’s end-of-month consolidation model, the dollar is the favorite as we look to conclude March and Q1 trading in the coming days. This is consistent with what Credit Agricole and Barclays indicated earlier here.
It is worth noting that BofA says the following:
“Our estimates point to the possibility of (1) material inflows into US dollar assets (about 1.0σ) and to lesser euro assets (about 0.2σ), versus (2) outflows from Japanese yen (about 1.7σ), emerging market (about 1.4σ) and GBP (about 1.1σ) assets.”
This rebalancing against the yen and sterling fits into what Barclays has been arguing with its own model as well. So, this is something to keep in mind if this happens.
However, Bank of America notes that USD/CHF may be the biggest beneficiary of the month’s close:
“The direction of travel clearly indicates strong buying for USD/CHF, driven primarily by the sharp decline in US stocks. With bond yields also posting negative returns, we believe this could be one of the biggest months of USD/CHF buying this year. The signal has been consistent enough for us to have confidence in the direction of flows.”
The currency pair saw a strong rally last week, rising by 1.4% and is now trying to test the resistance around the 0.8000 level. However, the pair broke above the 200-day moving average at the end of last week. This leads to it trading above both major daily moving averages for the first time since March 2025. Therefore, this in itself could be a catalyst for further potential upside for the pair.
