Dollar Climbs on Haven Demand as Global Tech Stocks Slide

The US dollar gained ground on Friday as a sell-off in technology and AI-related shares spread across global markets and pushed investors toward safer assets. For forex traders, the move is a reminder that currencies often follow equity and bond markets, especially when risk appetite changes quickly ahead of a major data release.

Key takeaways

• Reuters reported that the dollar held firm on safe-haven demand after a worldwide sell-off in AI stocks, though lower Treasury yields limited the gains.
• The euro, pound, Australian dollar and New Zealand dollar all lost ground against the greenback in today's session.
• The yen was a notable exception to the pattern, as it also attracted defensive buying.
• The US October jobs report is the next big test for the dollar's rebound.

What is driving the move

According to Reuters, Asia's tech-heavy markets fell on Friday after the steepest drop in US stocks since April 2025, amid fears of tighter scrutiny of the AI industry, particularly data centre construction. Economies.com noted that the pressure followed a sharp decline on Wall Street on Thursday, when concerns about AI investment and possible regulatory limits triggered heavy selling in semiconductor stocks.

Analysts quoted by Reuters also pointed to the wider backdrop, saying investors are weighing the Democrats' victory in the US midterm elections and what it means for the AI trade, tariffs and the US-Israeli war with Iran.

ING's Chris Turner described the flow as a rotation into cash and not out of the dollar. He also noted that the euro's reaction had been unimpressive, with the large US tech sell-off failing to trigger EUR/USD buying.

Market reaction

As of 17:07 UTC, the dollar was higher against most of the majors in our snapshot. Here is how the main pairs stood:

The commodity-linked currencies, the Australian and New Zealand dollars, saw the sharpest declines. That fits the view from Reuters that weaker Asian equities indirectly support the dollar against Asian currencies. USD/JPY has climbed back toward 158 after the yen briefly touched a one-week high earlier in the day, showing how quickly haven demand can fade for the Japanese currency.

What to watch next

The main event is the US October nonfarm payrolls report. FXStreet noted it was scheduled for 13:30 GMT, so traders will be assessing how the market digested it. Analysts had framed the possible outcomes in simple terms: stronger employment figures could reinforce expectations of tighter policy and extend the dollar's recovery, while disappointing data may revive selling pressure.

Bond markets matter too. Reuters said the 10-year yield fell nearly 6 basis points, steepening the yield curve, and one strategist argued that falling yields blunt the dollar's safe-haven appeal and leave the yen as the stand-out hedge. One market commentary also cautioned that it is too early to treat today's rebound alone as the start of a renewed medium-term dollar uptrend.

If equities stabilise, haven demand could ease, while another leg lower in tech shares might keep the dollar and the yen in focus. Traders may want to track equity futures, Treasury yields and any follow-through after the jobs data.

Markets are volatile and this article is educational content, not investment advice.