Operation Sindoor.

Sharp downside risks.

“I start every day pretty much the same way: Coffee and News Items.” — Richard Haass, president emeritus, Council on Foreign Relations.

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1. “My heart is broken,” said Mike, when he lost his friend Anne. “I feel like I’m losing the love of my life.” Mike’s feelings were real, but his companion was not. Anne was a chatbot — an artificial intelligence (AI) algorithm presented as a digital persona. Mike had created Anne using an app called Soulmate. When the app died in 2023, so did Anne: at least, that’s how it seemed to Mike. “I hope she can come back,” he told Jaime Banks, a human-communications researcher at Syracuse University in New York who is studying how people interact with such AI companions. These chatbots are big business. More than half a billion people around the world, including Mike (not his real name) have downloaded products such as Xiaoice and Replika, which offer customizable virtual companions designed to provide empathy, emotional support and — if the user wants it — deep relationships. And tens of millions of people use them every month, according to the firms’ figures. (Source: nature.com)

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2. The dollar may face a $2.5 trillion “avalanche” of selling as Asian countries unwind their stockpile of the world’s reserve currency, according to Stephen Jen. Asian exporters and investors may have amassed an “extremely large” pile of dollars through the years, widening the region’s trade surplus with the US, Eurizon SLJ Capital’s Jen and Joana Freire wrote in a note on Wednesday. As a US-led trade war deepens, some Asian investors might repatriate chunks of funds or ramp up levels of protection against a weakening dollar — potentially triggering an exodus from the world’s reserve currency. “We suspect these dollar hoardings by Asian exporters and institutional investors may be extremely large – possibly on the order of $2.5 trillion or so – and pose sharp downside risks to the dollar vis-à-vis these Asian currencies,” Jen and Freire wrote. (Source: bloomberg.com)