The dollar fell against most G-10 currencies and is poised to record its first weekly decline in over a month, as weakness in AI stocks drove investors toward safe-haven assets and U.S. Treasury yields retreated from recent highs.
The Bloomberg Dollar Index fell 0.1%, down 0.2% for the week.
Although the benchmark 10-year U.S. Treasury yield rose 6 basis points to 5.12% on Friday, it fell sharply this week as selling in chip stocks intensified investor concerns about valuations of AI-related stocks.
"The dollar's pullback coincided with a cooling of investor optimism on AI-related trades," said Derek Halpenny and Lee Hardman of MUFG in a report. "Dollar positions are significantly overweight, so once market sentiment around AI deteriorates, a reversal becomes likely."
The euro/dollar is flat at 1.1214, poised for its first weekly gain in five weeks after a consecutive five-week decline.
The euro paused on Friday, though options pricing still suggests it will face pressure over the coming months.
The British Pound rose 0.3% to 1.3314 against the U.S. Dollar.
Bank of England Governor Andrew Bailey stated that there is currently little evidence that inflation is becoming entrenched in UK price and wage dynamics.
The Australian dollar rose 0.4% to 0.6945, rebounding from a more than three-month low touched on Thursday.
USD/JPY rose 0.2% to 158.29.
