A strong US dollar will be the dominant factor in investment positioning for 2016, according to Bank of America Merrill Lynch (BAML)’s monthly fund manager survey.

The survey also showed that global managers remained pessimistic about emerging markets, with their weightings near record lows, as they perceived the region to be a value trap with weak earnings outlook.

As world markets braced for the first US interest rate rise in almost a decade, BoA-ML asked fund managers what was presently the most crowded trade. Some 53% of respondents named the long US dollar, up from 32% in November.

About 35% of managers believed the US dollar bull market would only end when the US Federal Reserve stopped raising rates. The majority of managers expected the Fed to raise rates three times in the next 12 months, starting this week; 88% percent expected another hike to happen next year, while 58% expected two increases in 2016.

“The strong dollar view is writ large across all assets, regional and sector allocations,” said Michael Hartnett, chief investment strategist at BoA-ML Global Research. “It will take a very dovish Fed and weak US earnings to reverse the strong dollar view in 2016,”

Expectations of a weak Chinese economy in 2016 and continuing headwinds from a stronger dollar have not help sentiment towards emerging markets.

Slim hopes of a recovery of growth in China are seemingly disappearing, with the proportion of respondents expecting a stronger China in 2016 falling to -43%, from -4% last month. A recession in China remains the biggest “tail risk” for global investors, a sentiment that was already expressed in August, as reported.

The survey of 215 fund managers with $620 billion in AUM was conducted by BoA-ML during December. Of Asia Pacific ex-Japan markets, fund managers favoured China, Korea and Taiwan, while they further increased their underweight positions on Australia, Indonesia and Malaysia.

As managers increased underweight positions on US equities, Europe and Japan have become the most favoured regions.

“European equities remain in favour despite disappointment over the ECB decision,“ said James Barty, head of European equity strategy at BoA-ML. (The European Central Bank cut interest rates by 10 basis points on December 3, disappointing market players who expected a sharper cut.)

Other results showed that risk-taking fell among survey participants as cash rose to 5.2% of portfolios, from 4.9% last month.