Dollar heads for weekly fall as investors gauge AI selloff impact
TLT•The dollar was on track for its first weekly decline in more than a month against the euro and yen as investors weighed the AI-driven stock selloff and the US rate outlook. The dollar index fell 0.35% to 101.70 and was set for a 0.55% weekly decline.
1. Dollar and yields
The dollar was set for its first weekly decline in more than a month against the euro and yen as investors assessed Wednesday’s stock market selloff and the US rate outlook. Analysts said the market moves may preview how currencies react to a major AI-driven selloff, with the dollar falling rather than drawing safe-haven demand.
2. Franc seen as beneficiary
The Swiss franc was set for a 0.85% weekly rise against the dollar, after gaining more than 1.4% over the previous two sessions. The euro rose 0.33% to $1.1258 and was on track for a 0.51% weekly gain; the yen was set for a 0.24% weekly rise and last gained 0.05% to 157.89.
3. Rate outlook in focus
US Treasury yields fell earlier in the week despite hotter-than-expected inflation readings, as cautious comments from Federal Reserve officials tempered expectations of an October rate hike. Markets assigned an 87% probability to the Fed holding rates unchanged later in the month. Macquarie strategist Thierry Wizman said a reduced outlook for AI investment could lower US yields and impair growth.
