Apollo Global Management chief economist Torsten Slok said the dollar’s recent
strength is vulnerable if an AI-led equity sell-off intensifies. He noted
international investors’ heavy, largely unhedged allocation to AI themes has
driven record rolling net foreign inflows into US equities over the past 12
months, boosting dollar demand as buyers convert local currency into dollars.
With US rates high, hedging costs remain elevated, making dollar moves more
sensitive to equity flows. Slok warned that a loss of confidence in AI
triggering equity outflows would pose material downside risk to the dollar.
