Dollar Firms Amid AI Selloff, Falling Treasury Yields
2026-11-06 Shafaq News The US dollar held firm against major currencies on Friday, drawing support from safe-haven demand after a selloff in AI stocks worldwide, though lower Treasury yields capped gains ahead of a closely watched US payrolls report.
Currencies are swaying to the tune of the share and bond markets, analysts said, as investors take stock of the Democrats' victory in the US midterm elections and what that means for the AI trade, tariffs and the US-Israeli war with Iran.
Asia's tech-heavy markets crumbled on Friday following the steepest decline in US stocks since April 2025 on fear of tighter scrutiny of the AI industry, particularly around data centre construction.
"The dollar is getting some support from safe-haven demand," said Dilin Wu, research strategist at Pepperstone. "That could keep it relatively firm against some Asian currencies, although falling Treasury yields may limit the upside."
The overnight flight to safety drove the two-year US Treasury yield , which is sensitive to interest rate expectations, down about 10 bps to its lowest since September 10. The 10-year yield fell nearly 6 bps, steepening the yield curve.
By the Asian afternoon, 10-year and 2-year yields were both little changed at 4.8348% and 4.4719%, respectively.
"Currencies will likely take their cue from other markets, including equities and fixed income," said Moh Siong Sim, currency strategist at OCBC.
Weaker Asian equities are indirectly supportive of the dollar against Asian currencies, he said.
DEMAND FOR SAFETY
The equity rout prompted investors to seek shelter in safe-haven currencies. The Japanese yen hit a one-week high of 157.27 a dollar before paring gains by the Asia afternoon at 157.805.
The yield on the 10-year Japanese government bond fell 16 bps to 2.61%, its lowest since June 26. The yield on China's 10-year sovereign bond also fell to a record low.
"The AI selloff is creating competing forces for the dollar," Sim said. Falling US yields are blunting the greenback's safe-haven appeal and leaving the yen as the stand-out hedge, though it is probably too early to expect sustained yen gains purely on AI concern, he said.
The euro was down 0.2% against the dollar at $1.1198, but poised for a 0.4% rise for the week, ending two weeks of losses. The dollar index , which measures the greenback against six peers, was up 0.25% at 101.76.
The sterling was last down 0.2% at $1.3433 after the Bank of England raised its policy interest rate as widely expected. The currency is on track to end the week 0.3% higher, for a fourth week of gains.
The Swiss franc was roughly flat against the dollar.
NON-FARM PAYROLLS
Next on the agenda is Friday's US non-farm payrolls report from which investors will try to gauge the Federal Reserve's interest rate path. Data on Thursday offered an upbeat prelude, with weekly initial jobless claims falling by 6,000 to a seasonally adjusted 189,000, matching a 57-year low in July and below the 196,000 estimate in a Reuters poll of economists.
"Recent data suggests improvement in the labour market, and we expect that to continue with this report," MUFG analysts said, referring to the non-farm payrolls data.
"Treasuries have just had a sizeable decline in rates heading into Friday's release. While we could see some of that move reverse, as long as we remain in a downward channel in rates, we recommend buying any meaningful dip on a stronger-than-expected number."
The move in Treasuries also reflected a repricing of Fed expectations, with fed funds futures scaling back the probability of a 25-basis-point interest rate hike in December to around 70% from more than 80% on Wednesday, traders said. (Reuters)
https://shafaq.com/en/Economy/Dollar-firms-amid-AI-selloff-falling-Treasury-yields
Oil Rebounds But Faces 12% Weekly Drop
2026-11-06 00:23 Shafaq News Oil prices are set for a sharp weekly drop on expectations of a de-escalation of the Iran war after US President Donald Trump's party suffered election losses, but Middle East supply concerns from the conflict continue to provide a floor for the market.
Brent crude futures for January rose on Friday by $1.57, or 1.6%, to $99.86 a barrel as of 0222 GMT. US West Texas Intermediate futures climbed $1.10, or 1.22% to $91.62 a barrel. Both contracts gained for a second day.
Still, the Brent contract is on track to drop by 12% this week after the December contract expired on October 30, while WTI is set to drop 12.1% this week.
The contracts plunged earlier this week on expectations that US Congressional elections on Tuesday, which swung the Senate and House of Representatives to the Democrat party and from Trump's Republicans, could lead to a de-escalation of the US-Israeli war against Iran, now in its ninth month.
Oil prices fell 8% on Wednesday alone after the Democrats swept the midterm elections, settling at two-month lows.
However, prices rebounded on a surge in tanker attacks on Wednesday and Thursday in the Gulf and the Strait of Hormuz — the crucial sea outlet for a majority of Middle Eastern oil shipments — that renewed the concerns about supply flows from the region.
"Crude oil rebounded as traders viewed Wednesday's selloff as overdone," said Daniel Hynes, senior commodity strategist at ANZ, in a note on Friday.
He said prices had been under pressure following the Democrat wins; however "the reality of the situation hit home" during Thursday's trading.
"Iran maintains control of the Strait of Hormuz and is unlikely to relinquish that control," he said, adding that overall flows through the Strait of Hormuz are under 60% of capacity.
Iran said on Thursday that three more tankers had been attacked in the Strait of Hormuz, and data from UK maritime security agency UKMTO suggested that attacks on tankers are still running at close to record pace. (Reuters)
https://shafaq.com/en/Economy/Oil-rebounds-but-faces-12-weekly-drop
Gold Prices Drop Ahead Of US Jobs Report
2026-11-06 01:00 Shafaq News Gold prices slipped on Friday as oil prices rebounded, fanning inflation worries and higher-for-longer interest rate expectations, while investors awaited key US payrolls data later in the day.
Spot gold fell 1.1% to $4,044.09 per ounce by 0501 GMT, but was on track for its best week since late August.
US gold futures for December delivery dropped 1.5% to $4,053.30.
"Crude oil has rebounded mostly over the past day, which remains one of the inflationary knockbacks pressuring gold," said Ilya Spivak, head of global macro at Tastylive.
Oil rose more than 1% even as it was on track for a sharp weekly drop on expectations of a de-escalation in the Iran conflict after the US election results, while persistent Middle East supply concerns continued to support prices.
Higher energy costs can reinforce expectations that the Federal Reserve will keep interest rates elevated for longer, pressuring the non-yielding bullion.
Asia's tech-heavy markets crumbled as fear of increased regulatory scrutiny and a slowdown in AI build-out unleashed the steepest fall in US stocks since the tariff-triggered "Liberation Day" rout in April 2025.
"In risk-off conditions like this, we’re seeing gold positions get liquidated to free up cash and cover margin calls elsewhere. It’s not the first time we’ve watched this dynamic temporarily override gold’s usual safe-haven appeal," said Tim Waterer, chief market analyst at KCM Trade.
The US non-farm payrolls report is due at 1330 GMT.
Traders currently see a 68% chance that the Fed will raise rates in December, down from the near certainty expected last month, according to CME's FedWatch tool.
On Thursday, two Fed officials made a case for modest and steady rate increases to tackle above-target inflation.
Elsewhere, Goldman Sachs on Thursday lowered its end-2026 gold price forecast to $4,150 per ounce from $4,650, citing the Fed's more hawkish stance.
Among other metals, spot silver fell 0.5% to $51.51 per ounce; platinum dipped 0.3% to $1,512.83 and palladium dropped 1.1% to $1,020.10.
However, all three metals were headed for weekly gains. (Reuters)
https://shafaq.com/en/Economy/Gold-prices-drop-ahead-of-US-jobs-report