Dollar remains steady as yen gains amid US equity selloff
Investors moved toward haven assets like the yen and Treasury bonds following a sharp decline in US stocks.
The US dollar held steady against major currencies on Friday after a significant selloff in US equities prompted investors to seek haven assets, according to the Economic Times.
The retreat from risk followed a Democratic sweep in Congress on Thursday that impacted US stocks, with the Nasdaq experiencing its largest single-day drop since April 2025. Global markets also faced pressure this week due to concerns regarding tighter scrutiny of the artificial intelligence industry and data centre construction.
The yen strengthened 0.2 per cent to a one-week high of 157.40 against the US dollar before losing some of those gains. The Swiss franc also rose 0.2 per cent against the greenback, while the dollar index remained roughly flat at 101.55.
Treasury yields declined as investors moved into bonds. The 10-year Treasury yield traded at 4.84 per cent in the Asian morning, while the two-year yield fell by about 10 basis points to 4.47 per cent. Traders noted that fed funds futures now show a 70 per cent chance of a 25-basis-point interest rate hike in December, down from over 80 per cent on Wednesday.
The euro remained flat at $1.1222 against the dollar, while the sterling rose 0.1 per cent to $1.3457 after the Bank of England raised its policy interest rate as expected. Analysts at OCBC stated that the AI selloff is creating competing forces for the dollar.
Market participants are now awaiting the US non-farm payrolls report on Friday to gauge the Federal Reserve's interest rate path. MUFG analysts suggested that recent data indicates an improving labour market.
