Al-related jitters entered the FX picture last week, although currencies are more accurately borrowing the reaction from the rates channel. The USD two-year OIS/SOFR has dropped 25bp from the 14 October post-US CPI print. These are mammoth moves considering they have been driven almost entirely by AI concerns, with effectively no macro input.Markets appear to have a clear reaction function in mind: stock market turmoil is enough to drastically reduce Federal Reserve tightening plans, even with inflation running hot. The reasoning is probably linked to the market wealth effect that many believe has underpinned US economic resilience. This is enough to suggest the 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.Still, contagion to broader US and world equity indices has so far been contained, while the Nasdaq drop has only erased the last 30 days of gains. Al-related sentiment will remain an input for FX this week, but could easily fade if tech stocks find some stability. From a macro perspective, despite the repricing lower in US rates, we do not feel this marks the start of a major USD downtrend. A December Fed hike remains a likely outcome; policymakers do not appear to be in a position to send a dovish message at the October meeting, and still-elevated energy prices argue against a material recovery in global bond markets.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. The US calendar is rather light this week, while the FOMC is in its pre-meeting communication blackout. For now, we are not observing any obvious FX impact from souring US-Ukraine (and Europe) relationships. Markets are probably quite cautious about pricing in an imminent end to the Russia-Ukraine conflict or any longer-term implications for Europe. Things could change in the case of meaningful developments this week.