The U.S. dollar drew its strongest investor demand since June 2024 over the past month, Bank of America said, as large asset managers ramped up purchases—particularly against emerging-market currencies—and helped tip the flow picture decisively in the greenback’s favor.

BofA’s client flow data show asset managers posted their largest dollar buying since July during the past week, a burst of activity that accounted for a substantial share of the month’s net demand. Even so, positioning metrics suggest these investors still hold a light net short in the dollar, indicating scope to add if macro conditions continue to favor the greenback. The bank monitors these shifts as part of its routine market analysis.

The euro, by contrast, faced steady supply pressure through October. Corporate-related flows dominated, with broad euro supply also visible in the options market—an indication that sentiment toward the single currency cooled as the month progressed. While not a definitive signal on its own, persistent corporate selling has historically coincided with softer EUR performance when unaccompanied by offsetting speculative demand.

Emerging-market FX bore the brunt of the re-risking into dollars. BofA flagged negative flows across all EM regions, with notable selling in the Singapore dollar, South African rand, and Brazilian real, and to a lesser extent the Mexican peso. The pattern underscores a cautious stance toward higher-beta currencies amid lingering policy uncertainty and a sturdier U.S. rates backdrop.

Why it matters: A stronger flow impulse into the dollar—driven by real-money accounts rather than just fast money—tends to be more durable. If asset managers continue to pare residual short dollar exposure while corporates supply euros, the path of least resistance points to a firmer USD and a heavier EUR, with EM FX staying sensitive to U.S. yield moves and risk sentiment.