Dollar Heads for First Weekly Loss in Five Weeks as Bond Yields Ease

The US dollar is on track for its first weekly decline in five weeks, slipping 0.26% as lower Treasury yields reduced the currency’s appeal and fresh worries about AI-linked corporate finances pushed investors toward the safety of government bonds. G7 bond markets just posted their strongest weekly performance since late May.

The euro was the main beneficiary, rising 0.16% to $1.1238 and pulling further away from its recent 17-month low. The Japanese yen ticked up to 157.98 per dollar, while the benchmark US 10-year yield settled at 5.085% and Germany’s 10-year at 3.421%.

Technicians urge caution on euro optimism. DailyForex notes EUR/USD printed a hammer candle off the lows — a possible short-term recovery signal — but remains structurally bearish on the euro with the US rate advantage intact and French fiscal worries unresolved. The 1.1350 zone is the resistance to watch; failure there keeps the downtrend alive.

Cross-asset moves backed the risk-off tone: Brent crude jumped 3.72% to $109.86 a barrel on Middle East supply fears, with attacks around the Strait of Hormuz surging in the past ten days, while gold edged up to $4,167.14 an ounce on the softer dollar.

What’s next: the Fed is now in its blackout period ahead of the October 27–28 meeting, a heavy US earnings week (Tesla, Meta and more) could swing sentiment, and Friday brings PMI and consumer-sentiment data. For traders, volatile weeks like this are exactly when position sizing matters — our forex tools include a pip and position-size calculator, and the forex section explains how yields move currencies. (Not financial advice.)