Bank of America: US Dollar hedging costs decrease, US Dollar against most currencies may face pressure this year.

Analysts at Bank of America stated in a report that with the decline in US interest rates, the US dollar may face depreciation pressure against most currencies this year, as the cost of hedging against a weakening US dollar will decrease. The analysts pointed out that as the Federal Reserve cuts interest rates, the interest rate differential between the US and other economies will further narrow, reducing the cost of hedging against US assets for US dollar exchange rates. The report said, "We believe that hedging costs are still high, which is one of the main obstacles preventing the real launch of US dollar exposure hedging activities by 2025." Additionally, the analysts stated that the Trump administration's policies aimed at reducing housing-related costs may prompt further interest rate cuts by the Federal Reserve. At the same time, risks related to the independence of the Federal Reserve may also potentially create a bearish scenario for the US dollar.