Analysts at Bank of America Merrill Lynch report say the correction in the dollar may not last:
Our weekly proprietary flows suggest that the downward USD correction will be short-lived and point to balanced risks looking forward.
Their flow model shows the strongest positive signal in AUD/CHF. They note that hedge fund selling in CHF has been accelerating while corporate and official buying is underpinning the Australian dollar.
Separate flow data shows an accross-the-board move from stocks into bonds, in something they say should benefit USD and CAD against EUR, GBP and JPY.
