The dollar slipped from two-week highs on Friday, surrendering some safe-haven gains as risk assets rebounded after a sharp AI-driven market selloff.
Despite the pullback, the greenback remained set for a weekly gain, supported by firmer U.S. consumer sentiment data and lingering caution over labor markets.
Analysts said the dollar has traded inversely to equities, bitcoin and precious metals, with Friday’s dip mirroring a broader risk-on reversal.
This week’s dollar strength was sparked by President Donald Trump’s nomination of Kevin Warsh as Fed chair, seen as less supportive of aggressive rate cuts.
Global markets were rattled by scrutiny of Big Tech AI spending, prompting a broad de-risking across equities, metals and cryptocurrencies.
Attention now turns to next week’s delayed U.S. payrolls report, which could reshape expectations for rate cuts in the first half of the year.
Meanwhile, the yen hovered near 157 per dollar, on track for its worst weekly loss since October, as investors brace for Japan’s pivotal election.
