Deutsche Bank's global head of FX research, George Saravelos, said in a client note reported by Bloomberg that foreign purchases of US stocks fund the entire US current account deficit. He estimated that about 90% of the over $20 trillion in US equities held by foreigners reflects price gains rather than new buying. Foreign investors have often skipped currency hedging because falling stocks tended to lift the dollar, but Saravelos said that pattern reverses when a shock begins in the US, since hedgers then sell dollars. The Bank for International Settlements found that non-US hedging fed the dollar's slide after April 2025's tariff announcement. Saravelos named falling US real yields, alongside weaker stocks and a weaker dollar, as the signal to watch.
Why it matters: Because bitcoin and gold are priced in dollars, changes in the dollar's haven role matter to crypto readers following the note's mechanism.
Summary by Dextape, based on reporting by BeInCrypto. Written with AI from the publisher’s text and checked automatically for copied wording and unsupported figures. Not investment advice.
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