Dollar gains on safe-haven demand as AI stock rout hits Asian markets

what happened

The dollar was steady against major currencies on Friday, supported by haven demand after AI-related stocks sold off worldwide, Reuters reported. Currencies were also tracking moves in equity and bond markets, as traders weighed the Democrats' win in the US midterm elections and what it means for tariffs and the AI trade.

Asia's tech-heavy markets slumped after US stocks posted their steepest drop since April 2025. Investors feared tighter scrutiny of the AI industry, particularly data centre construction. The two-year US Treasury yield fell about 10 basis points to its lowest since September 10, then partly rebounded during the Asian afternoon.

The yen hit a one-week high of 157.27 per dollar before giving back some of its gains. The euro was at $1.1198, while sterling traded at $1.3433 after the Bank of England raised its policy rate as widely expected. The dollar index rose 0.3% to 101.74. Traders now put the chance of a 25-basis-point Fed hike in December at about 70%, down from more than 80% on Wednesday. Weekly jobless claims fell to 189,000, close to a 57-year low.

why it matters

The key question for markets is whether haven demand for the dollar can outweigh falling yields and expectations for Fed policy. Friday's non-farm payrolls report could shift rate expectations and decide whether the current currency moves hold.

market impact

Dollar and yen: haven demand supports the currencies, but falling Treasury yields limit the dollar's gains

• ↔US dollar mixed — haven demand supports it while lower Treasury yields limit gains
• ▲Japanese yen pressure up — haven demand amid the equity selloff

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