The dollar index slipped to 101.5 on Tuesday, its lowest level in nearly three weeks, weighed down by renewed concerns over the AI sector, declining oil prices on hopes for a diplomatic resolution to the conflict in Iran, and weaker-than-expected US housing data. Housing starts fell 5.2% in September, while pending home sales dropped to a record low, underscoring the persistent drag of elevated mortgage rates on housing demand.
At the same time, the Federal Reserve is widely expected to leave interest rates unchanged at its meeting next week, though markets are still pricing in a 25bps rate hike in December.
In currency markets, the euro recovered as unrest in France eased overnight, while the yen strengthened, ending a two-day losing streak after an auction of longer-dated Japanese government bonds drew record demand.
