The US dollar has long been the financial world’s security blanket. When markets panic, capital floods into dollar-denominated assets like clockwork. Deutsche Bank thinks that playbook might be breaking down.
George Saravelos, Deutsche Bank’s Global Head of FX Research, warned in a client note that rising geopolitical tensions and heavy AI exposure in US equity markets are undermining the dollar’s traditional safe-haven status. The implication is uncomfortable for anyone with significant dollar exposure: a potential long-term capital rotation away from USD assets.
The AI problem hiding in plain sight
Saravelos’s argument is that the dollar’s fortunes have become so tightly linked to AI-driven growth that the currency now behaves more like a risk asset than a safe haven. Instead of being the thing you buy when you’re scared, the dollar is increasingly the thing you sell when you’re scared.
The AI concentration risk isn’t hypothetical. US equity markets have been heavily weighted toward tech and AI-adjacent companies. When investor sentiment toward AI wavers, even slightly, the ripple effects hit the dollar because so much foreign capital is parked in those same equities.
