US dollar weakens as technology selloff drives Treasury yields lower

The US dollar declined against major currencies on Friday, October 30, extending its retreat as a sharp selloff in technology stocks encouraged investors to buy Treasury bonds, pushing yields lower and reducing the greenback's interest rate advantage.

The dollar remained under pressure despite stronger-than-expected US economic growth and persistent inflation, with investors increasingly concerned about the consequences of heavy artificial intelligence spending for corporate profitability.

Price overview

The US Dollar Index traded around 102.03 points, down 0.01%, after moving between 101.59 and 102.03 during Friday's session.

EUR/USD advanced approximately 0.13% to $1.1195, while GBP/USD rose 0.37% to $1.3427.

USD/JPY declined 0.41% to 157.07 yen.

Technology selloff weighs on dollar

Disappointing earnings from major US technology companies unsettled equity markets, raising concerns about the growing cost of AI infrastructure.

The resulting demand for Treasury bonds pushed yields lower, weakening support for the dollar despite expectations that US borrowing costs could remain elevated.

Fed outlook remains uncertain

The Federal Reserve maintained interest rates at 3.75%–4.00% on Wednesday, with two policymakers favoring an immediate increase.

Thursday's economic figures showed US GDP growing 3.4% in the third quarter, while annual PCE inflation accelerated to 3.6% in September.

Although the figures strengthened the case for further tightening, declining bond yields prevented the dollar from capitalizing on the data.

Yen benefits from Bank of Japan decision

The yen strengthened after the Bank of Japan maintained interest rates while signaling that further tightening remains possible.

The decision increased expectations of another Japanese rate increase in December.

Market outlook

The Dollar Index faces resistance near 102.03, with support around 101.59.

Further declines in Treasury yields could extend the dollar's retreat, although persistent inflation may limit losses by keeping expectations of another Federal Reserve rate increase alive.