Key facts
- AI stocks have cratered this week, spreading stress to parts of the credit market.
- The US 10-year Treasury yield is set for its largest weekly fall in over a year.
- Traders are pricing in a 72% chance of the Fed standing pat on rates this month.
The dollar declined against a basket of major currencies and the euro gained on Friday, as a sell-off in artificial intelligence-related stocks and a drop in US Treasury yields curbed the greenback's recent strength. The euro had fallen to a 17-month low against the dollar in the preceding weeks, partly due to concerns over France's debt and energy supply issues. The dollar's recent appreciation had been partly fueled by the AI boom's positive impact on the US economy. Analysts suggest that further volatility in AI investments could lead to a further weakening of the dollar. Federal Reserve Chair Kevin Warsh's remarks on Friday were closely watched for any signals regarding the central bank's upcoming interest rate decision.