Dollar Weakens as Haven Demand Drives Treasury Yields Lower and Lifts Yen

The dollar fell as a stock market selloff fueled safe-haven demand, pushing U.S. Treasury yields lower and boosting demand for haven currencies such as the yen.

The Bloomberg Dollar Index slipped 0.1%. Stocks declined after Meta's earnings reignited questions about the outlook for AI-related debt.

The equity slump once again highlighted the safe-haven status of U.S. Treasuries.

"Money is flowing into safe-haven assets, providing support for U.S. Treasuries and driving the yen and the franc to outperform," said Elias Haddad, senior markets strategist at Brown Brothers Harriman & Co., in a report.

The dollar fell 0.8% against the yen to 156.96. The dollar dropped 0.3% against the franc to 0.8218. The euro was little changed against the dollar at 1.1230.

Pressure in the French bond market intensified, with broad risk aversion, combined with the threat of renewed protests over the weekend, further underscoring France as a weak link in global markets.

The Australian dollar fell less than 0.1% to 0.7024, but has gained 1.1% this week, on track for its biggest weekly advance since August. The New Zealand dollar declined 0.3% to 0.5687.

As fuel prices retreated, New Zealand's third-quarter inflation came in below expectations, with consumer prices rising 3.7% year-on-year, below economists' forecast of 3.8%.