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US Dollar
Source: Newsmaker.id
The US Dollar Index (DXY) faced sharp downward pressure during Thursday’s (October 15) trading session, erasing gains that had emerged following the release of US consumer price index (CPI) data. The DXY retreated from Wednesday’s high—which had neared 103.00, an 18-month peak—dropping toward the 101.90 level, its lowest point since October 7. This weakness coincided with a massive sell-off in artificial intelligence (AI) stocks, prompting investors to shift capital into US government bonds (Treasuries).
Pressure on technology stocks has intensified as high US interest rates increase the financing costs required to build AI data centers. Yields on the debt of companies developing AI infrastructure—many of which carry high debt loads—have reached record levels, fueling investor concerns regarding the sustainability of the sector's expansion. The reallocation of funds into Treasuries pushed the yield on the 10-year US government bond to a three-week low. Simultaneously, foreign investors offloading US tech stocks and repatriating their capital have further intensified selling pressure on the dollar.
On the economic front, the US Producer Price Index (PPI) for September surged by 1.3%—well above the 0.5% forecast—with rising energy costs accounting for roughly half of that increase. Retail sales grew by 0.8%; however, the "core" retail sales figure—a component used in GDP calculations—rose by only 0.1%. Increased sales at gas stations accounted for $4.1 billion of the $5.7 billion total rise, suggesting that the growth in retail sales was driven largely by higher fuel prices. Although the producer inflation data briefly pushed the DXY toward 102.25, those gains quickly evaporated under pressure from the bond and equity markets.
Investors are now turning their attention to statements from Federal Reserve officials and evolving expectations regarding U.S. monetary policy. According to market estimates, the probability of an interest rate hike at the October 27–28 meeting stands at approximately 25%, while the likelihood of a hike in December is nearing 90%. Furthermore, U.S. industrial production data for September is projected to rise by 0.4%, following a period of stagnation in August. The interplay between stock market developments, movements in Treasury yields, and the direction of Federal Reserve policy is expected to be the primary factor in determining whether the dollar will regain strength or continue its decline.
Source: Newsmaker.id