US dollar rises as global tech selloff fuels safe-haven demand

The US dollar strengthened Friday as a global technology stock selloff boosted demand for safe-haven assets, while investors awaited US employment data for clues about the Federal Reserve’s interest rate outlook.

The dollar index, which measures the greenback against a basket of six major currencies, rose 0.41% to 101.96.

Sterling fell 0.36% to $1.3402, retreating from a brief move above $1.35 earlier this week, its strongest level since mid-September. The euro declined 0.26% to $1.1189, while the dollar gained 0.09% against the Japanese yen to 157.85.

Demand for the dollar increased as investors assessed the prospect of tighter oversight of the artificial intelligence industry following the Democrats’ sweep in the US midterm elections.

Concerns about potential restrictions on data-center expansion weighed on technology shares, prompting investors to seek safety. Falling US Treasury yields, however, tempered support for the greenback.

Attention also turned to Friday’s October employment report, which could influence expectations for the Fed’s next policy decision.

Markets were pricing in around a 68% probability of a December interest rate increase, down from nearly 83% a day earlier, according to Trading Economics.

Investors were also weighing the possibility that Democratic gains could increase pressure for an end to the Iran conflict, potentially reducing oil prices and easing inflationary pressures.