Dollar Holds Decline
The US dollar index traded around 102 on Friday after declining in the previous session, underperforming other safe-haven assets such as government bonds and precious metals following the recent selloff in technology and artificial intelligence stocks. Markets are increasingly factoring in a potential slowdown in the AI capital expenditure boom, which has been a key driver of the US economy and financial markets. Meanwhile, investors continued to assess the Federal Reserve’s monetary policy outlook, as stronger-than-expected US economic data reinforced expectations of further interest rate hikes. Markets are currently pricing in approximately a 72% probability that the Fed will keep rates unchanged this month, while the likelihood of a December rate hike has risen to 92%. Cleveland Fed President Beth Hammack warned that the central bank might need to raise interest rates more aggressively if public inflation expectations deteriorate significantly.
The US dollar index traded around 102 on Friday after declining in the previous session, underperforming other safe-haven assets such as government bonds and precious metals following the recent selloff in technology and artificial intelligence stocks. Markets are increasingly factoring in a potential slowdown in the AI capital expenditure boom, which has been a key driver of the US economy and financial markets. Meanwhile, investors continued to assess the Federal Reserve’s monetary policy outlook, as stronger-than-expected US economic data reinforced expectations of further interest rate hikes.
Markets are currently pricing in approximately a 72% probability that the Fed will keep rates unchanged this month, while the likelihood of a December rate hike has risen to 92%. Cleveland Fed President Beth Hammack warned that the central bank might need to raise interest rates more aggressively if public inflation expectations deteriorate significantly.