Deutsche Bank AI Warning Spells Risk for Dollar, Bitcoin, Gold, Stocks

A warning issued by Deutsche Bank on Friday suggested an AI-led selloff of U.S. stocks by foreign investors, valued at over $20 trillion, could diminish both the value of those stocks and the dollar itself.

Such a scenario would reverse a longstanding trend. Traditionally, the dollar strengthens when equities decline, acting as a safe haven. Since Bitcoin and gold are denominated in dollars, they both saw gains in August amid dollar weakness and expectations around Federal Reserve rates.

Why Foreign Investors Face a Double Hit

Saravelos, Deutsche Bank’s global head of FX research, laid out the case in a client note reported by Bloomberg.

He said that foreign buying of U.S. stocks now completely funds the U.S. current account deficit—the gap between what America spends and earns overseas.

“We estimate that roughly 90% of the $20+ trillion value of US equities owned by foreigners is attributable to price appreciation rather than underlying buying.”

In the past, foreign investors did not hedge currency risk because a stock market drop usually lifted the dollar. Saravelos explained that this buffer works in reverse when the crisis originates in the U.S.

When investors scramble to hedge, they have to sell dollars.

This is exactly what took place after Liberation Day, President Donald Trump’s April 2025 tariff announcement. The Bank for International Settlements (BIS) found that hedging by non-U.S. investors helped push the dollar down.

Is the AI Dollar Already Diverging from Stocks?

Intel fell nearly 30% after a weak forecast, and Amazon dropped alongside other technology names.

The S&P 500 was 1.28% lower in mid-afternoon UTC. The U.S. Dollar Index, which measures the dollar against six major currencies, was up 0.09%. Gold slid 2.44%, and Bitcoin also declined.

Both are among the worst major assets of 2026, despite gold’s best month since 1999 in August. The comments reported from Deutsche Bank did not mention either asset.

Saravelos identified the signal to watch. That is a simultaneous drop in U.S. real yields—bond returns after inflation—alongside weaker stocks and a weaker dollar. It would signal markets cutting their AI spending forecasts.

Friday’s trading did not show that mix, as the dollar remained firm. Saravelos did not predict a crash. He stated that the risks for the dollar are more two-sided than what markets have accounted for in recent weeks.