Morningstar: The US dollar may just be entering a period of cyclical weakness, with AI valuations nearing levels seen during the tech bubble.

Morningstar released a research report stating that the US dollar may be entering a prolonged period of cyclical weakness, rather than a long-term decline. AI has a huge impact on industry valuations, and the stock market's concentration on AI-related companies is increasing. Broad stock indices already have a significant exposure to AI companies, increasing the concentration risk faced by investors. In its 2026 market outlook, Morningstar stated that despite the recent sharp decline in the US dollar, various signs indicate that the dollar has not experienced a comprehensive structural collapse. The weakness of the US dollar largely reflects cyclical and policy-driven factors: slowing US economic growth, narrowing interest rate differentials, persistent fiscal deficits, and high inflation. Changes in global capital flows, updates to hedging of US dollar assets, and weakening confidence in US macroeconomic policies are external factors exacerbating pressure on the US dollar.