Global research firm BCA Research recommended on Sunday that investors sell the U.S. dollar against the South Korean won, Japanese yen, New Taiwan dollar, Singapore dollar and euro, citing structural and cyclical factors.
The firm, which currently holds long positions in the won, yen and New Taiwan dollar versus the dollar, said current account surpluses in these economies would provide support as international investors reduce exposure to U.S. assets. BCA also noted that the Chinese yuan is expected to appreciate against the dollar, though it anticipates Chinese authorities will limit these gains through intervention, leaving the yuan weaker relative to other surplus currencies.
The recommendation excludes the Brazilian real, Indonesian rupiah and Philippine peso, which BCA expects to underperform the dollar. The firm’s bearish dollar view is partly tied to expectations that U.S. core real yields—defined as the yield on Treasury Inflation-Protected Securities excluding the term premium—will decline. Recent increases in U.S. yields have largely reflected higher term premiums driven by fiscal risk and inflation rather than stronger growth expectations, BCA said. Higher term premiums tend to weaken the dollar, while higher core real yields typically support it.
Foreign capital inflows into U.S. equities, particularly those driven by enthusiasm for artificial intelligence, have helped fund the U.S. current account deficit and supported the dollar, the firm added. BCA expects these flows to slow if high-priced U.S. technology stocks lose momentum.
In broader asset allocation guidance, BCA recommended underweighting U.S. equities, keeping emerging market exposure neutral, moderately overweighting Europe and substantially overweighting Japan. The firm also favored non-U.S. government bonds following any short-term sell-off. A weaker dollar is expected to benefit gold and gold mining stocks, according to the research note.
BCA’s recommendations were published on August 23, 2026.
