FX.co ★ Dollar Pressured by Lower Treasury Yields

The US dollar index hovered around 101.6 on Friday, staying close to a three-week low as Treasury yields declined sharply amid safe-haven demand, weighing on the greenback. The benchmark 10-year Treasury yield fell more than 10 basis points to below 5% on Thursday, hitting a one-month low as an intensified selloff in technology and artificial intelligence stocks drove investors into government bonds. Mounting doubts about the durability of AI-related investments—one of the key engines of recent US economic growth—also led markets to scale back expectations for additional Federal Reserve rate hikes. Futures now imply roughly a 91% probability that the Fed will keep rates unchanged next week, while the chance of a rate increase in December is estimated at about 80%. The dollar posted notable losses against the yen, which typically benefits from safe-haven inflows during periods of heightened market uncertainty.