The euro fell to $1.1200 on Friday as French borrowing costs climbed and French business activity unexpectedly contracted in October. The dollar edged higher, but a sell-off in AI stocks meant it did not draw the usual safe-haven bid. Traders now turn to three central bank decisions between Oct. 28 and Oct. 30.
The euro was down 0.15% at $1.1200 on Friday and set for a weekly loss of 0.42%. French government bonds drove the move. A sharp sell-off pushed the country's risk premium to levels last seen during the euro zone sovereign debt crisis in 2011.
Data then showed French business activity unexpectedly contracted in October, a second blow to the single currency. Against the yen, the euro touched 175.25, its lowest since October 2025.
Dollar gains little as AI stocks slide
The dollar index rose 0.1% to 101.86. A technology-led sell-off in artificial intelligence stocks unsettled global markets, yet the greenback struggled to catch a bid. This week's rout, driven by doubts over whether the AI investment boom can deliver, showed the dollar is no longer the automatic beneficiary of risk aversion.
Investors instead sought other safe-haven assets. The yen stayed stronger after Thursday's rally, and the dollar traded little changed at 156.78 yen. The Swiss franc hit a one-month high on Thursday before easing 0.2% on Friday.
Fed bets soften ahead of three central bank meetings
The wobble fuelled bets on a more dovish Federal Reserve. CME's FedWatch tool showed about a 93% chance that the Fed will hold rates at 3.75%-4.00% on Oct. 28, and roughly a 75% chance of a quarter-point hike on Dec. 9, sharply down from fully priced in.
The European Central Bank, also seen on hold, announces its decision on Oct. 29. The Bank of Japan wraps up the run on Oct. 30, with Friday's hotter inflation figures adding spice.
Source: Investing.com
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