Dollar Index slides to three-week low near 101.45 as yields ease
The US Dollar Index fell to a fresh three-week low around 101.45 as 10-year Treasury yields dropped 0.7% to near 5.07%, pressured by weaker housing data.
Deutsche Bank analysts linked the pullback in yields to soft September housing figures: housing starts fell 5.2% against an expected 1.9% rise, while pending home sales slowed sharply, with annual growth dropping to its weakest pace since 2023 at -12.6% year-on-year. The bank said the data has reinforced demand for longer-dated US government bonds.
At the same time, worries about a slowdown in artificial intelligence spending eased after Meta reaffirmed large-scale investment plans for AI infrastructure. Deutsche Bank noted Meta shares gained more than 2% in after-hours trading following third-quarter revenue of $64.6 billion, above the $63.3 billion estimate.
The company’s fourth-quarter revenue guidance of $73-76 billion came in near the top of the $73.6 billion estimate, and Meta raised its 2026 capital expenditure range to $135-145 billion from $130-145 billion, signalling continued heavy AI-related spending.
On the daily chart, the Dollar Index traded at 101.52, just below its 20-day exponential moving average of 101.65 and above the 38.2% Fibonacci retracement at 101.26, pointing to consolidation after its recent advance. The 14-day Relative Strength Index near 51 suggested neither buyers nor sellers held a clear edge.
Why it matters: Softer Treasury yields tied to weaker housing data tend to weigh on the dollar, affecting EUR/USD, USD/JPY and other major pairs, while steadier AI-spending signals from large tech firms can support broader risk sentiment across US equity indices.
Source: FXStreet