Deutsche Bank warns: The dollar has lost its exceptional status and is no longer a hedging asset
Report revealed to "Deutsche Bank" In German, the traditional relationship between USDand Deutsche Bank is the US currency "It has lost its exceptionality as a global safe haven"with a more positive global growth environment. The unique advantage that made investors flock to the dollar in times of crises has declined significantly, especially with the emergence of internal risks in the American market itself.
This new situation, according to the report, makes the dollar less attractive as a hedging tool in investment portfolios, especially when negative shocks come from the American interior, which may redraw the map of safe havens in the global financial system.
Artificial intelligence worries the American market
George Saravelos, head of currency research at the bank, indicated that the American market has turned into "High risk market" Due to the concentration of artificial intelligence stocks and the risks of their fluctuations, and the huge losses that befell the software sector and led to its decline by about 20% this year, in addition to fears of huge investments in artificial intelligence ($700 billion) without guaranteed returns.
The 2002 bubble returns to the surface
The report shows that the dollar can fall with a decline in stocks if bad news is coming from the United States, as happened during the collapse of technology company stocks in 2002 in what was known as "Burst of the dot-com bubble"which reduces the attractiveness of the dollar as a hedging tool.
Promising alternatives on the horizon
Saravelos explained that global markets are currently turning to alternatives other than the US dollar, with the emergence of other more attractive currencies such as the Australian dollar, Scandinavian currencies, and Emerging markets.
Trump’s policies increase the dollar’s suffering
The challenges were not limited to artificial intelligence only, but Trump’s tariffs contributed to a wave of selling of American assets, which pushed the dollar to a loss of 9.4% in 2025 and a continued decline of 1.4% this year.
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