Dollar lures bids for safety as AI rout grips Asian markets
TLT•The dollar rose 0.3% to 101.74 as investors sought safety after a global AI-stock selloff, while falling Treasury yields capped gains. Markets awaited US non-farm payrolls data for clues on the Federal Reserve’s interest-rate path.
1. Dollar gains on haven demand
The US dollar held firm against major currencies on Friday after an AI-stock selloff hit Asian markets. The dollar index rose 0.3% to 101.74, while the euro fell 0.2% to $1.1198. Falling Treasury yields limited the dollar’s gains: the 10-year yield was up 2 basis points at 4.8531% in the Asian afternoon, and the two-year yield rose 1 basis point to 4.4873%.
2. Yen and rate expectations
The yen reached a one-week high of 157.27 per dollar before paring gains to 157.8. The euro was on track for a 0.4% weekly gain, while sterling was down 0.1% at $1.3433 after the Bank of England raised its policy rate as widely expected. Traders reduced the implied probability of a 25-basis-point Federal Reserve rate hike in December to around 70%, from more than 80% on Wednesday.
3. Payrolls in focus
Investors were awaiting Friday’s US non-farm payrolls report for clues on the Fed’s interest-rate path. Weekly initial jobless claims fell by 6,000 to a seasonally adjusted 189,000, below economists’ 196,000 estimate and matching a 57-year low reached in July.
