These 3 analysts views on the US Dollar: All say AI jitters cracked its safe-haven appeal, none agree on what comes next

A hot September US Consumer Price Index (CPI) (core +0.3% MoM) was supposed to be US Dollar-positive. Instead, the US Dollar (USD) spent the week failing to rally on inflation news. All three fresh reads published on Monday agree on why: the "AI wobbles" have cracked the Greenback's safe-haven appeal. However, they disagree on what happens next: Matthew Ryan sees further pressure if the AI correction deepens, ING thinks the downside is capped around a US Dollar Index (DXY) return to 101.00, and Kenny Polcari reframes the whole story as one of financing costs and rotation from growth to value rather than a US Dollar trade.

Ebury’s Matthew Ryan: US inflation fails to lift the US Dollar, 'AI wobbles' could weigh further on the Greenback

Ryan's read is that the usual inflation playbook broke last week: "last week's price action suggests bad inflation news no longer seems able to push the dollar higher." He holds out little urgency from the US Federal Reserve (Fed) — "We maintain our call for a hold this month, but expect the decision will be contested" — and flags a structural difference versus September's bond rout: "Unlike the global bond rout of September, the AI wobbles are a US story, and so the flight-to-safety bid does not go to the dollar." If the correction deepens, "its implications for US growth and investment are a clear negative for the greenback." — Read the full report

ING Global Economics Team: AI jitters have damaged USD safe haven appeal

ING agrees on the diagnosis — the US Dollar "will not be the safe-haven of choice and may actually lag many other G10 currencies if stock market instability originates in tech/AI" — and on the mechanism, noting the USD two-year OIS/SOFR dropped 25bp from the post-CPI print with "effectively no macro input." But it draws the line at a downtrend: "we do not feel this marks the start of a major USD downtrend." Its base case keeps a December Fed hike on the table, and on levels: "A return to 101.0 in DXY remains possible over the coming weeks, but we do not see much more downside beyond that for now." — Read the full report

Kenny Polcari: Tech gets punched, AI debt fears grow, Oil pierces $100 forcing a flight to value

Polcari is the outlier in framing — his piece is a rotation story, not a currency call, but the US Dollar-relevant engine is visible in his rates narrative. The trigger was debt-financed AI spending itself: "the issue is not the AI trade, the issue is FINANCING - because with the FED in hiking mode, that story just got more expensive and as rates rise, the numbers will either work or they won't." Yet even with a hot CPI, he documents money fleeing growth into safety: "money ran out of tech and the growth trade and into the very classic 'safety trade' - US Treasuries" — a bid that, as both FX pieces note, no longer translates automatically into Dollar strength. — Read the full report

The takeaway

The consensus is uncharacteristic: three distinct voices, none of them willing to call the US Dollar a safe haven in an AI-driven sell-off, even after a hot US CPI and with the Fed still in hiking mode. The split is deep — Ryan thinks the pressure extends as far as the AI correction does, ING caps the correction at 101.00 with a December hike intact, and Polcari's rates-and-rotation tape suggests the "safety trade" now lives in Treasuries rather than the US Dollar. Watch the October FOMC decision and whether tech stabilizes: a contested hold or a rate-cut signal opens ING's deeper downside, while a tech bounce and a hawkish hold vindicate the "damage contained" camp.

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)