Euro gets much-needed reprieve as AI wobbles rock the dollar
TLT•The dollar was on track for its first weekly decline in five weeks as concerns about AI investment and falling U.S. yields lifted the euro from a 17-month low. The euro rose about 0.1% to $1.1210, while the U.S. 10-year Treasury yield was set for its biggest weekly fall in more than a year.
1. Dollar loses ground
The dollar was headed for its first weekly fall in five weeks on Friday, as worries about AI investment and lower U.S. yields halted its recent gains. The euro rose about 0.1% to $1.1210, recovering from a 17-month low after falling more than 3% against the dollar over the previous five weeks.
2. AI and yields
Investors have raised concerns that data centre operators may not become profitable in time to pay their debts. The resulting flight to Treasuries put the U.S. 10-year yield on track for its largest weekly decline in more than a year. The dollar index stood at 102.07 and was set for a 0.14% weekly drop.
3. Fed expectations
Markets were pricing in a 72% chance that the Federal Reserve would hold rates later this month, up from 53% a month earlier. Bets on a rate hike had risen after a hotter-than-expected CPI report, then eased after Fed officials said the central bank could wait for more clarity.
