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Investing.com - The U.S. dollar has shown signs of reversing its downward trend following resilient U.S. labor data, according to a recent Bank of America analysis.
The dollar had been steadily depreciating after resolution to the Iran shock, with the Trend factor outperforming both Carry and Value factors in foreign exchange markets over the past month.
Despite this depreciation, BofA notes the U.S. dollar was unable to break lower after resilient U.S. labor data, as reflected in the bank’s macro Employment factor.
BofA’s quantitative framework now indicates broad-based reversal signals for USD downtrends, as detailed in their "FX Quant Insight: USD trend reversals" report dated July 7, 2025.
The bank’s analysis shows reversal risks are currently highest for USD downtrends against the euro and Canadian dollar in G10 currencies, and against the Colombian peso, Polish zloty, and Hungarian forint in emerging markets.
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