Market News
Dollar steadies as AI jitters spur yen gains and weigh on euro - INVESTING.COM
BY Jaiveer Shekhawat
Investing.com - The U.S. dollar was little changed on Friday as investors weighed concerns over artificial intelligence valuations and rising geopolitical tensions, while the Japanese yen held firm after a safe-haven rally and the euro remained under pressure from French debt-market turmoil.
TheUS Dollar Index was broadly flat, following Thursday's decline to its lowest level since the beginning of October. The greenback also traded little changed against the yen at 156.78, as the Japanese currency retained much of its recent gains.
This week's rout in tech shares, driven by doubts over whether the AI investment boom can deliver, exposed a shift in the currency market's pecking order. The greenback is no longer the automatic beneficiary of risk aversion.
The wobble instead fuelled bets on a more dovish Federal Reserve and pulled Treasury yields lower, with the benchmark 10-year yield rose 0.7% to 4.984%.
Traders are still wagering on another hike before year-end. CME's FedWatch tool showed about a 93% chance that the Fed will hold rates at 3.75%-4.00% on Oct. 28, with the remainder on a quarter-point hike. For the Dec. 9 meeting, it priced roughly a 75% chance of one quarter-point hike, sharply down from fully priced in.
The greenback traded little changed at 156.78 yen. The yen remained stronger after Thursday's rally, which took the dollar as low as 156.08 yen, as investors sought safer assets amid concerns over the sustainability of artificial intelligence investment. The pair tumbled nearly 1% on Thursday and is down about 0.6% on the week.
Data added to the yen's lift. Japan's core consumer prices rose 2.1% in September from a year earlier, up from 1.7% in August and back above the Bank of Japan's 2% target for the first time in nine months.
The euro had a rougher week. It was down 0.2% at $1.1193 and set for a weekly loss of 0.45%. Against the yen it touched 175.25, its lowest since October 2025, and was last at 175.53, heading for a 1.0% weekly decline.
France was the culprit. A sharp sell-off in French government bonds pushed the country's risk premium to levels last seen during the euro zone sovereign debt crisis in 2011. On Friday, data showed French business activity unexpectedly contracted in October, a second blow to the single currency.
