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2026-07-13 23:40:14
[Apollo Warns of Dollar's Vulnerability During AI Correction] Torsten Slok, chief economist at Apollo Global Management, stated that the recent dollar rally could be at risk if the sell-off in AI-related stocks intensifies further. Slok pointed out that international investors' active positioning in AI-themed stocks has driven a record net inflow of foreign capital into the US stock market over the past 12 months. However, most of these investors have not hedged their foreign exchange risks. "Therefore, if AI disappoints and causes a decline in capital inflows, it will pose a significant downside risk to the dollar." This means that the dollar actually "has a hidden dependence on AI trading." The AI boom and the subsequent record highs in the US stock market have attracted a large influx of overseas funds. Overseas investors need to convert their local currencies into dollars before buying US stocks, which provides significant support for the dollar. At the same time, compared to other major economies, US interest rates remain high, making the cost of purchasing dollar exchange rate hedging tools too high. Therefore, the dollar's performance is more susceptible to stock market fluctuations. He stated that if investors lose confidence in AI trading and begin selling stocks, the dollar could also decline.
