Concerns about an imminent collapse of the US dollar appear premature, despite persistent long‑term pressure on the US currency, Bank of America says in a research note.

In recent weeks, the greenback has been trading with high volatility. At times, it even plunged to multi‑year lows, fueling talk of a “sell America” strategy and a structural weakening of the currency. However, BofA’s assessment of market data does not yet support a scenario of a mass flight from US assets.

BofA retains a bearish long‑term view on the US dollar, expecting gradual weakening in 2026–2027. Nevertheless, analysts stress that it is likely to be a slow process rather than a sharp liquidation.

Positioning and capital flow data do not point to a coordinated exit from US assets. The dollar risk premium has risen only modestly, and options markets do not show a sharp increase in short positions compared with three months ago.

Cross‑market flows confirm the picture. Inflows into US stocks and bonds do not indicate a large‑scale foreign sell‑off. Since the start of the year, there has been only one day when the dollar and the US stock market were simultaneously under heavy pressure. BofA says this pattern is inconsistent with a widespread currency collapse.

Instead of mass selling, the bank points to active currency hedging by global investors as the more likely reaction. European asset managers, for example, may increase hedging of dollar exposures, which could exert gradual downward pressure on the exchange rate without prompting a sudden move.

Macroeconomic indicators also do not signal a grave risk of loss of confidence in the US dollar. Inflation expectations remain stable, and fiscal risks, while widely debated, have not triggered market stress.

BofA notes that part of the expected dollar weakening may reflect gains in other currencies rather than purely economic woes in the US. The bank underscores potential support factors for the euro, including steady economic growth in the euro zone, Germany’s fiscal stimulus, and possible stimulus measures in China. Over time, European assets could receive additional support from higher defense spending and new trade agreements.