Deutsche Bank: The Era of AI Dollars Has Arrived, Dollar's Safe-Haven Status Weakens

Deutsche Bank points out that AI-driven market adjustments may change the traditional relationship between the dollar and U.S. stocks, making the dollar no longer a guaranteed safe-haven asset. Recently, technology stocks and the dollar have weakened in tandem, indicating that the risks faced by the dollar are more two-sided than previously priced by the market. Overseas investors have invested over $20 trillion in U.S. stocks, with about 90% of asset growth coming from rising stock prices rather than new purchases. Changes in stock hedging mechanisms are also a key factor. Over the past decade, the U.S. stock market has shown a negative correlation with the dollar, prompting investors not to hedge against currency risks. If the U.S. stock market faces shocks due to domestic factors, the dollar may decline alongside U.S. stocks, exacerbating losses for overseas investors. If U.S. real yields and the stock market decline simultaneously, the market will lower its expectations for AI capital expenditure growth, further confirming the weakening of the dollar's safe-haven status. Deutsche Bank refers to this trend as "the era of AI dollars has arrived."

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