Bank of America: Confusing policies cause a sharp decline in the attractiveness of the US dollar, and fund managers have reduced their holdings to the lowest level in 19 years.

The global fund manager survey (FMS) released by Bank of America on Tuesday showed that investor interest in US assets has weakened due to President Donald Trump's chaotic trade policies. In May of this year, global asset managers reduced their holdings of the US dollar to the highest level since 2006. Over the weekend, China and the US held talks in Geneva and reached a 90-day truce agreement on trade, breaking the deadlock between the two largest global economies. Both sides temporarily reduced tariffs on each other, easing the direct threat to the global economy. Bank of America stated, "Investor sentiment was low before the Geneva talks, particularly lacking confidence in US assets. While the fund manager survey in May was not as pessimistic as in April, it still leaned towards bearish. Given the positive impact of the US-China trade truce in avoiding economic recession or credit crisis, market turmoil trading is expected to increase moderately only." The bank pointed out that fund managers reduced their cash holdings from 4.8% to 4.5%, which is usually a sign of increased confidence. However, their reduction of holdings in the US dollar reached the highest level since May 2006. Bank of America said that 75% of the survey was conducted before the Geneva negotiations. The survey questioned 208 fund managers with a total of $522 billion in assets under management. A quarter of the respondents expect a hard landing for the economy, but this percentage is lower than the nearly 50% in the April survey. Meanwhile, 61% of respondents believe the economy will experience a soft landing, meaning a moderate slowdown without falling into recession, which is the main expected scenario at present.