The dollar fell against haven currencies on Thursday as concerns over AI sustainability and rising oil prices pressured equities, driving Treasury yields lower on growth fears, while worries over French debt weighed on the euro.
Oil rose as persistent Houthi attacks on Saudi Arabia heightened supply concerns, while President Donald Trump said Iran was doing all it could to drive oil prices higher ahead of the US midterm elections.
Ukraine President Volodymyr Zelenskiy said Starlink speeds have yet to be restored in Ukraine and expressed hope for talks with US Secretary of State Marco Rubio in coming days.
SNB minutes signaled less need for FX intervention to restrain Swiss franc strength.
In an effort to quell unrest, French President Emmanuel Macron said that "illegitimate" protests would be banned in coming days.
In North American data, US weekly jobless claims held near a 57-year low, while Canada PPI rose 1.4% annualized in September, highest reading on over 4 years. A number of October PMIs are due on Friday.
The dollar index eased after failing to clear its 21-DMA at 101.85, while implied vols rose across the curve and one-month risk reversals continued to favor USD calls ahead of key central bank meetings and U.S. elections.
EUR/USD pared losses as softer US yields eroded earlier dollar strength, though the outlook remains mixed while holding above 1.1200 but below the 21-DMA at 1.1251.
EUR/CHF fell amid wider French-German yield spreads and after SNB minutes signaled less need for FX intervention to restrain Swiss franc strength.
GBP/USD hit a five-week high at 1.3418 as sharply lower Treasury yields offset early haven-driven dollar demand, while EUR/GBP remained on track for its weakest monthly performance of the year.
AUD/USD rebounded to 0.7020 as softer US yields checked risk-off USD demand, with the pair maintaining a constructive bias above its 10- and 21-DMAs.
USD/JPY remained under pressure below 157 on haven-driven yen demand and sharply lower Treasury yields, with bearish momentum potentially targeting the Sept. 28 and 30 lows at 156.51/38.
Treasury yields tumbled 15-20 basis points. The 2s-10s curve was little changed at +30.1bp.
The S&P 500 slid 1.39%, fueled by weakness in tech shares.
WTI oil rose 2.3% but remained below the $100/bbl mark.
Gold dropped 2.7%, silver hit a new YDT low and copper fell 2.7%.
Heading toward the close: EUR/USD -0.12%, USD/JPY -0.84%, GBP/USD +0.04%, AUD/USD -0.14%, DXY -0.16%, EUR/JPY -0.94%, GBP/JPY -0.78%, AUD/JPY -0.99%.(Editing by Burton Frierson Robert Fullem is a Reuters market analyst. The views expressed are his own)
