Dollar Heads for First Weekly Loss in Over a Month
The US dollar was on track for its first weekly decline in more than a month against the euro and Japanese yen on Friday. Investors have shifted their attention toward the US interest-rate outlook. Concerns over AI-related investments and data-center debt have unsettled financial markets.
The US Dollar Index fell 0.25% to 101.77 and was set to record a weekly decline of approximately 0.45%. The move came despite stronger-than-expected US consumer and producer inflation data. The data suggested that factors beyond inflation were shaping expectations for Federal Reserve policy.
AI Investment Concerns Weigh on the Dollar
The recent sell-off in AI-linked shares has raised questions about whether data-center operators can generate enough profit to service their debt. Investors have also moved toward government bonds, pushing Treasury yields lower.
This shift has challenged the dollar’s usual safe-haven behavior. Instead of gaining as equities weakened, the currency came under pressure. Markets considered the possibility that AI investment concerns could affect US growth and the future path of interest rates.
Euro and Yen Gain as Markets Await Fed Signals
The euro rose to around $1.1235 and was on track for a weekly gain. Meanwhile, the yen also recorded a modest weekly advance after four consecutive weeks of losses. The Bank of Japan’s comments about raising rates in line with economic and financial conditions provided additional context for yen trading.
Investors are watching Federal Reserve Chair Kevin Warsh’s remarks for clues about the next policy decision. The dollar’s direction may depend on whether persistent inflation or concerns about growth and investment have a greater influence on rate expectations.
