Bank of America highlighted that the demand for EUR/USD currency pairs this week has been notably subdued. The assessment was based on the bank’s proprietary flow data, which indicated a lackluster performance despite starting the week with neutral market positioning.

The bank’s analysis pointed out that the market has not fully reacted to recent European Union reforms, which were detailed in a note published on March 10, 2025.

The trading patterns observed from Monday to Wednesday showed a divergence in behavior between Hedge Funds and Real Money investors. Hedge Funds were seen selling the USD and, to a lesser extent, the EUR, primarily in favor of the Japanese Yen (JPY). This activity also included a reduction in their Norwegian Krone (NOK) long positions.

Real Money investors, on the other hand, did engage in buying EUR, but not against the USD. Earlier in the week, they were net buyers of the USD, while selling off other G10 and emerging market currencies, with the British Pound (GBP) experiencing more significant sales.

According to Bank of America, Real Money’s EUR-USD positioning at the beginning of the week was still modestly short, which is notable considering there wasn’t aggressive selling of the USD by these investors in the fourth quarter.

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