Nomura warns US dollar could weaken if AI hype cools
Business
Nomura, the brokerage, says if the current AI hype cools off, the US dollar could take a hit.
Right now, foreign investors' exposure to US assets has reached extreme levels, with US NIIP liabilities at $21.3 trillion, thanks to big bets on American stocks boosted by AI.
Heavy foreign reliance could test dollar
The report points out that this heavy reliance on foreign money makes the dollar shaky if AI-driven growth slows down.
Plus, global trust in US policies is slipping, and allies have massively increased their dollar holdings since 2012.
If these trends reverse or the AI boom fades, the dollar's strength could really be tested.