Dollar Holds Near High Amid AI, Euro Weakens Due to France

The US dollar remained near a two-week high on Tuesday. The recovery on Wall Street, led by technology companies, returned investors to risk. The revival of trading in the field of artificial intelligence supported the dollar index at 102.11. Anthropic filed documents for an IPO in the US, and chip manufacturers' shares rose.

The euro became the main victim of the situation. The currency traded near an almost two-week low and lost about 1.5% in October. The sell-off of French government bonds last week raised the country's debt risk premium to a maximum since the 2011 crisis. The yield on French securities reached 5.14%, the highest level since 2002. Moody’s did not lower France's rating on Friday, but analysts at Barclays believe that tension will persist until the presidential elections next spring.

The yen weakened by 0.1% and moved away from last week's monthly high. The Bank of Japan is expected to keep the rate at 1.25% at the meeting on Friday, but may signal readiness for further increases.

The week will be busy due to central bank decisions. The Federal Reserve is likely to leave the rate at 3.75–4.00%. The European Central Bank is expected to keep the deposit rate at 2.5%. The Bank of Canada and the Reserve Bank of New Zealand may raise rates.

In Asia, the Indonesian rupiah weakened by 0.2% and remained near the record low. The Indian rupee also lost 0.2%. The Israeli shekel rose to an almost two-week high amid elections to the Knesset.