Forex Today: US Dollar holds ground ahead of US CPI, AI fears weigh on stocks

💡 DMK Insight

The USD’s stability around 97 amidst Wall Street’s sharp decline signals a flight to safety, and here’s why that matters: With tech stocks under pressure due to AI-related concerns, traders are likely reallocating funds into the USD, which traditionally serves as a safe haven. This shift could impact forex pairs, especially those involving the Euro and Yen, as they may weaken against the dollar. If the USD maintains this level, it could indicate a broader risk-off sentiment in the market, prompting traders to consider shorting riskier assets or hedging their positions. However, it’s worth noting that the tech sector’s struggles could lead to a broader economic slowdown, which might eventually weigh on the dollar itself. Watch for key support levels around 96.50 and resistance at 98. A break below 96.50 could signal a shift in sentiment, while a bounce back above 98 might indicate renewed confidence in equities. Keep an eye on upcoming economic data releases that could further influence the dollar’s trajectory.