Wall Street Warns of Dollar's "False Safe Haven": If the AI Narrative Collapses, Global Capital Could Stampede for the Exits
Dominic Bunning, head of G10 FX strategy at Nomura Securities, and other Wall Street figures warn that the dollar is increasingly becoming a price-sensitive crowded trade as overseas capital chases the AI wave; once cracks appear in the AI growth narrative, its status as a safe-haven asset will conflict with its role as a risk-sensitive asset. Erik Nelson of Wells Fargo noted that the dollar's real trade-weighted index has been above its long-term average for 12 consecutive years, the longest streak since 1973; foreign inflows are concentrated in US equities and corporate bonds, and an unwinding wave could hit US stocks, the bond market and interest rate expectations simultaneously. CDS spreads of highly indebted computing power companies such as CoreWeave have surged sharply in recent weeks, seen as a signal that the peripheral line of defense is loosening.
Dominic Bunning, head of G10 FX strategy at Nomura Securities, and other Wall Street figures warn that the dollar is increasingly becoming a price-sensitive crowded trade as overseas capital chases the AI wave; once cracks appear in the AI growth narrative, its status as a safe-haven asset will conflict with its role as a risk-sensitive asset. Erik Nelson of Wells Fargo noted that the dollar's real trade-weighted index has been above its long-term average for 12 consecutive years, the longest st
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