The U.S. dollar index steadied at 102.11, anchoring a near two‑week high as optimism around artificial‑intelligence stocks returned following Anthropic’s public filing for a U.S. IPO. The rally helped lift the S&P 500 by 0.7% and the Nasdaq Composite by 0.8%, with chipmakers leading the gains and Asian technology shares rising in sympathy.
The euro fell to $1.1171, a near two‑week low and roughly 1.5% weaker in October, after a sharp sell‑off in French government bonds pushed the country’s debt‑risk premium to its highest level since the 2011 sovereign‑debt crisis. France’s 10‑year yield touched 5.14%, the highest since 2002, before modestly recovering when Moody’s refrained from downgrading Paris on Friday. Barclays strategists warned that French financial stress is unlikely to ease before the spring presidential election.
"While risk appetite has shown some resilience, particularly in Europe, investors are increasingly sensitive to the possibility that interest rates may remain elevated for longer than previously anticipated," said Daniela Hathorn, senior market analyst at Capital.com.
The Japanese yen weakened 0.1% to 157.66 per dollar, moving further from the one‑month high it had touched amid earlier safe‑haven buying. The Bank of Japan is expected to keep its policy rate at 1.25% at the conclusion of a two‑day meeting on Friday, but signalled readiness to raise borrowing costs again as price pressures build; the September hike had taken rates to their highest in 31 years.
In the United States, the Federal Reserve opened a two‑day policy meeting on Tuesday and is projected to leave its target range at 3.75%‑4.00% on Wednesday. Futures indicate less than a 10% probability of a rate hike this week but about an 80% chance of a hike in December, placing Chair Kevin Warsh’s press conference under close scrutiny.
The European Central Bank is expected to hold its deposit rate at 2.5% on Thursday, while the Bank of Canada and the Reserve Bank of New Zealand are forecast to raise rates. Microsoft and Alphabet are slated to report earnings on Wednesday, with Amazon following on Thursday, and the U.S. mid‑term elections are set for 3 November.
In other markets, the Israeli shekel rose to a near two‑week high as Israelis prepared to elect all 120 members of the 26th Knesset, the first national election since the Oct 7, 2023 Hamas attack. Pre‑election polls suggested a tight race with no clear majority.
The Indonesian rupiah slipped 0.2% to 18,129 per dollar, hovering near its record low, prompting Bank Indonesia to pledge adjustments to its policy tools to support the currency. The Indian rupee weakened 0.2% to 95.353 per dollar, while the Chinese yuan remained steady around 6.668 per dollar.
Overall, the dollar’s resilience was underpinned by AI‑related optimism, whereas the euro’s decline reflected heightened French fiscal and sovereign‑risk concerns.