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Global investors have pared negative sentiment on the dollar, while remaining bullish on the euro and yen.
This is according to Bank of America's much-watched Fund Managers survey, which offers a sentiment gauge of the world's most important investors.
"Bearish USD sentiment has diminished, with a net 29% of global investors expecting the USD to weaken over the coming twelve months, down from 47% last month," finds Bank of America's latest survey.
Nevertheless, when asked which currency they expect to appreciate or depreciate the most in the next 12 months, investors still show a preference for dollar depreciation.
"The macro backdrop supports a structural decline in the USD, driven by US convergence to global growth and rates, waning safe-haven appeal, and ongoing concerns around the Fed's credibility and independence," says TD Bank in its 2026 year-ahead FX outlook.
The world's most influential investors are also still bearish on the pound, with just 3% of surveyed investors expecting it to rise during the course of the next year.
Conviction on the yen and euro is meanwhile bullish.
"30% expect the Japanese yen to outperform in 2026, followed by gold at 26%," says Bank of America.
The Fund Manager Survey is a monthly report that canvasses the views of approximately 400 institutional, mutual and hedge fund managers around the world.
The survey's overall sentiment measure, which is based on cash levels, equity allocation, global growth expectations, rose to 6.4 from 5.7, the highest level since February.
Reflecting this bullish confidence, investors said the most likely outcome for the global economy over the next year was a 'soft landing' (53%) whereby there is a healthy cooling from the peaks, while 37% expect no landing at all, which is the most since January 2025).
Just 6% expect a 'hard landing'.
Concerning the big macro drivers, investors say the most bearish development in the coming months (45%) would be upside inflationary surprises and Federal Reserve rate hikes, followed by AI capex acceleration stalling at 26%.