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US Dollar
Source: Newsmaker.id
The US Dollar held steady in trading on Friday (October 23), following a decline to its lowest level since early October. The DXY index hovered around 101.75, while the USD/JPY pair traded at 156.78. The Yen remained strong, having posted significant gains driven by an increased demand for safe-haven assets amid concerns regarding the valuation and sustainability of AI-related investments.
Volatility in technology stocks has shifted dynamics in the foreign exchange market. Worries over the scale of AI investments have led investors to anticipate a more dovish stance from the Federal Reserve, putting downward pressure on Treasury yields. The 10-year US Treasury yield stood at approximately 4.98%; while the market still prices in the possibility of an interest rate hike before the end of the year, such expectations have begun to wane.
The Yen received further support from Japanese inflation data. Japan’s core consumer inflation rose to 2.1% year-on-year in September—up from 1.7% in August—climbing back above the Bank of Japan’s 2% target. This development has fueled speculation that Japanese monetary policy could shift toward a tighter stance.
Meanwhile, the EUR/USD pair traded near 1.1193, down 0.2% and heading for a weekly decline of approximately 0.45%. The Euro remains under pressure as turmoil in the French bond market has pushed the country’s risk premium to levels not seen since the Eurozone debt crisis of 2011. Unexpectedly, data showing a contraction in French business activity for October has added further strain.
In the safe-haven space, the Swiss Franc (CHF) also drew attention, touching a one-month high against the US Dollar on Thursday before correcting downward by 0.2% on Friday. Elsewhere, Brent crude traded above US$116 per barrel, having surged following an attack on Saudi Arabia that raised concerns over potential disruptions to energy supplies.
Market attention is now focused on a "triple-header" of central bank meetings next week. The Federal Reserve will announce its decision on October 28, followed by the European Central Bank (ECB) on October 29, and the Bank of Japan (BoJ) on October 30. Investors will be closely monitoring the decisions and statements from all three central banks, seeking clues regarding the future direction of interest rates amid concerns over inflation, energy prices, and global economic uncertainty.
Source: Newsmaker.id