The dollar stabilized near its highest levels in 19 months, today, Friday, on track to record its largest weekly gains in two months, with increasing investor bets on a larger hike in US interest rates, which pushed Treasury bond yields higher and brought the Japanese yen back to the level of 160 yen to the dollar, which raises fears of Japanese authorities intervening to support the currency.
US Treasury bond yields rose after US President Donald Trump's statements, in which he said that the United States does not need an agreement with Iran, raised concerns about oil supplies from the Middle East, which pushed crude prices up and boosted inflation expectations. This came to add pressure to the concerns raised by this week’s data about the continuation of US inflation at high levels, which prompted investors to evaluate the possibility of the Federal Reserve (the US central bank) resorting to raising interest rates by a larger amount than usual next month, according to Reuters.
Two-year US Treasury bond yields rose by 34 basis points during the past two sessions, recording their largest increase in two days in three and a half years, reaching 4.8602 percent in the latest trading.
The euro rose 0.1 percent to $1.1059, remaining above its lowest level against the US currency since April 2025. But it is heading for a weekly decline of 0.7 percent, which is the largest since late September.
Federal Reserve officials warned this week that US inflation would continue at high levels, while some of them expressed a willingness to consider raising interest rates by 50 basis points if price pressures did not ease. Data from the CME Group's Fed Watch tool showed that traders estimate the probability of raising interest rates at this rate next month at about 14.5 percent, up from zero percent last week.
Investors are also monitoring the turmoil in technology company stocks, following the departure of NVIDIA CEO Jensen Huang, at a time when the sector is facing pressures related to financing and regulatory concerns.
“If we see a further sharp decline in stock markets, this could put negative pressure on the US dollar,” said Carol Kong, currency strategist at Commonwealth Bank of Australia.
She added that the strong momentum of the US currency may continue in the near term, especially with anticipation of the statements of Federal Reserve officials next week, noting that any additional signals that support raising interest by 50 basis points may give the dollar more gains.
The dollar index, which measures the performance of the US currency against a basket of major currencies, reached 103.18 points, stable near its highest level since April 2025. The index is heading for weekly gains of 0.9 percent, the largest since September.
The yen is under pressure from intervention fears
The Japanese yen stabilized at 159.89 against the dollar, remaining close to its weakest levels since the beginning of September, amid mounting fears of Japanese authorities interfering in the exchange market. The Japanese currency fell by 0.9 percent during the week, on track to record its largest weekly loss since September.
Japanese Finance Minister Satsuki Katayama said on Friday that the government will take appropriate measures to deal with currency market fluctuations, after the yen briefly touched the level of 160 yen to the dollar on Thursday.
Japan spent 15.4 trillion yen ($96.47 billion) to support its currency, after it fell to its lowest level in four decades at 163.99 yen to the dollar in late July.
Analysts at Mitsubishi UFJ (MUFJ) said in a note that the repricing of US interest rate expectations towards further tightening has widened the difference in interest rates between the United States and Japan, currently exceeding the support provided by expectations of continued normalization of the Bank of Japan’s monetary policy.
They added that the dollar's approach to the 160 yen level makes the risk versus return less attractive for investors who bet on further rise in the dollar and yen pair.
The Australian dollar fell by about 2.5 percent over the past month, making it the worst performer among the major G10 currencies against the US dollar, and the only currency within the group in which markets price the possibility of lowering interest rates next year. The Australian dollar reached $0.6802.
The dollar was largely stable against the Swiss franc at 0.835 francs, approaching its highest level in a month.
In energy markets, oil prices varied on Friday, but were heading for the second weekly loss in a row. Brent crude futures settled at $95.79 per barrel, while West Texas Intermediate crude fell by 0.4 percent to $88.38.
In the cryptocurrency market, Bitcoin fell by 4 percent to $68,587, falling below the main $70,000 level and recording its lowest levels since August. Ethereum also fell by more than 4 percent to $1,925.59.
The performance of Asian stocks varied today, Friday, as investors evaluated the repercussions of Jensen Huang’s resignation from his position as CEO of NVIDIA, and its potential repercussions on the global artificial intelligence industry.
US stock futures rose slightly, despite the losses recorded by Wall Street earlier, after Nvidia shares fell by more than 4 percent following Huang’s departure from the company.
In Japan, the Nikkei 225 index rose 0.8 percent to 61,283.16 points. Shares of Tokyo Electron, a company that manufactures semiconductor equipment, rose by 1.5 percent, while shares of Kioxia Holdings, a manufacturer of memory chips, fell by 2.5 percent, and shares of SoftBank Group, an investor in Open AI, fell by 5.2 percent, according to the Associated Press.
In South Korea, the standard KOSPI index fell by 0.5 percent to 5,317.05 points, and shares of Samsung Electronics, one of the largest South Korean companies by market value, fell by 0.7 percent, while shares of SK Hynix, which specializes in manufacturing memory chips, fell by 2 percent.
In Taiwan, the TAEX index rose by 1.7 percent, while shares of TSMC (Taiwan Semiconductor Manufacturing Company), the country's largest chip manufacturing company, increased by 0.9 percent.
The resignation of Huang, who co-founded NVIDIA and was one of the most prominent architects of its strategy in the field of artificial intelligence, in addition to his pivotal role in the global artificial intelligence boom, raises questions about the repercussions of his departure on the path of developing this technology.
Huang was the most prominent face of the company, and some workers in the sector believed that his status exceeded that of NVIDIA itself.
His resignation announcement came on Thursday, after his romantic relationship raised concerns about American national security, while the company's long-time chief financial officer, Colette Kress, assumed the position of interim CEO.
The stocks of many AI equipment companies in Asia are highly dependent on the pace of AI infrastructure development in the United States.
In Hong Kong, the Hang Seng Index fell by 0.9 percent to 23,786.48 points, while the Shanghai Composite Index rose by 0.2 percent to 3,663.71 points.
In Australia, the Standard & Poor's ASX 200 index fell by 0.7 percent to 9,084.80 points, while the Indian Sensex index fell by 0.2 percent.
The US Standard & Poor's 500 index fell by 0.4 percent on Thursday, the Dow Jones Industrial Average fell by 0.4 percent, and the Nasdaq Composite Index, which is dominated by technology company stocks, declined by the same percentage.
In contrast, shares of some of Nvidia's competitors rose, as shares of AMD (Advanced Micro Devices) rose by 5.9 percent during Thursday's trading.
The markets were also subjected to widespread pressure due to the rise in oil prices, following statements by US President Donald Trump, on Thursday, in which he said that the United States “does not need an agreement with Iran,” despite the continuing conflict in the Middle East.
“We do not need an agreement with Iran,” Trump wrote on social media. Those days are long gone. “We got their money, hundreds of billions of dollars, and we got their strait, too.”
Oil prices stabilized in early trading on Friday, as Brent crude futures, the global standard, fell by 0.1 percent to $95.70 per barrel, after hovering around $72 per barrel in late February, before the outbreak of war with Iran.
US crude futures also fell by 0.4 percent to $88.41 per barrel.
In currency markets, the dollar rose to 159.91 Japanese yen, compared to 159.84 yen, while the euro recorded $1.1059, compared to $1.1055 in the previous session.
Gold prices rose today, Friday, with the emergence of buying operations to take advantage of the decline in prices, after the yellow metal recorded its lowest level in more than a year in the previous session, while investors’ focus shifted to the expected US inflation data.
Gold rose in instant transactions by 1.1 percent to $3,918.59 per ounce by 05:18 GMT, but it is still heading to record a weekly loss of 3.6 percent. US gold futures for December delivery also rose by 1 percent to $3,922.60 per ounce, according to Reuters.
Kelvin Wong, chief market analyst at OANDA, said that today's rise largely reflects an adjustment in investors' positions, after the sharp wave of decline in the previous session pushed a number of short-term momentum indicators to levels indicating severe oversold saturation.
He added that one of the factors that may support gold in the short term is a sudden decline in US Treasury bond yields, which may limit the strength of the dollar.
On Thursday, gold prices in spot transactions recorded their lowest levels since October 2025, with the rise in oil prices and the decline in hopes for reaching a settlement to the conflict in the Middle East, which raised fears of high inflation and the continuation of interest rates at high levels.
Market expectations indicate an 89 percent probability of raising US interest rates by 25 basis points in December, while the probability of raising them by 50 basis points is about 11 percent, according to the “Feed Watch” tool of the CME Group.
Although gold is usually considered an inflation hedge, rising interest rates increase the opportunity cost of holding the non-yielding metal, making it less attractive to investors.
New York Federal Reserve Bank President John Williams said on Thursday that further increases in interest rates are likely, as part of the US central bank's efforts to reduce high levels of inflation in an economy that still enjoys a degree of strength.
Data showed that the number of Americans who filed new applications for unemployment benefits increased more than expected last week, but it remained at a level consistent with the stability of the labor market.
Markets are now awaiting the release of US Producer Price Index data, scheduled to be published at 13:30 GMT.
As for other precious metals, silver rose in spot transactions by 0.5 percent to $50.27 per ounce, and palladium rose by 1.8 percent to $1,011.65, but the two metals are also heading to record weekly losses.
Platinum also rose by 1 percent to $1,533.29 per ounce, heading for limited weekly gains.
