Deutsche Bank Warns AI‑Driven Selloff Could Undermine the Dollar, Impacting Stocks, Bitcoin, and Gold

Deutsche Bank’s global FX research head, George Saravelos, warned that an AI‑led market correction could break the long‑standing pattern where a falling U.S. stock market strengthens the dollar. Foreign investors own more than $20 trillion of U.S. equities, about 90 % of which is driven by price appreciation rather than new purchases. If a sharp selloff occurs, the need for currency hedging could force non‑U.S. investors to sell dollars, weakening the currency. A weaker dollar would, in turn, pressure dollar‑denominated assets such as Bitcoin and gold, which had rallied in August on a softer dollar and Fed rate expectations. The warning follows recent declines in tech stocks like Intel and Amazon, and a modest rise in the U.S. Dollar Index despite broader market weakness. The scenario would alter the traditional safe‑haven role of the dollar during equity downturns.