The U.S. dollar is poised for its strongest week since November, steadying near a two-week high as a stock rout driven by AI-spending concerns rattles investors. The yen, on the other hand, is steadying ahead of a national election on Sunday. The dollar's strength is attributed to the nomination of Kevin Warsh as the next Federal Reserve Chair, who is expected to avoid pushing for rate cuts, easing concerns about central bank independence. However, the sharp selloff in technology stocks this week is causing investors to fret about the massive spending on artificial intelligence and the potential impact of fast-advancing AI tools on various sectors. Despite this, the risk aversion has helped the dollar, even as U.S. Treasury yields slide due to weaker-than-expected jobs market data. The dollar index is hovering near its highest since January 23, set for a 1% increase for the week. The euro is at $1.1784, while sterling is nursing steep losses in early Asian hours. The Bank of England kept interest rates on hold on Thursday, but only after an unexpectedly narrow 5-4 vote, signaling a potential reduction in borrowing costs if inflation drops soon. The yen is a shade stronger in early trading, with investors on edge ahead of a national election where Prime Minister Sanae Takaichi's victory could reduce near-term constraints on fiscal policy goals. Gold and silver, which have become more volatile due to leveraged buying and speculative flows, have experienced steep selloffs this week, with silver down 3% in early trading. Bitcoin is also choppy, hitting its lowest since October 2024, last at $63,273 after dropping to as low as $60,017.
