Bank of America: Investors currently believe that shorting the US dollar is the most crowded trade at the moment.

In July, the global fund manager survey by Bank of America showed that investors believe shorting the US dollar is currently the most crowded trade, with about 34% of respondents holding this view. This is the first time in the history of the survey that shorting the US dollar has surpassed going long on gold as the most crowded trade. Investors are underweight in US dollar positions, as well as in US stocks, energy, and consumer staples stocks. The survey showed that 47% of investors believe the US dollar is overvalued, a decrease from 61% in the June survey. Additionally, 14% of investors believe that a sharp drop in the US dollar due to capital outflows is the third largest tail risk.