Update from North America

Dollar Down as Tech Sells Off

2 min read

The U.S. Dollar is down today as the result of a tech sell off driven by concerns over Artificial Intelligence spending.

Poor earnings reports which showed heavy capital expenditures sent Amazon sliding more than 6%, while Intel plunged more than 25%. Other companies tied to A.I. infrastructure fell as well, including Nvidia, AMD, and Alphabet. This caps off a particularly poor month of performance for tech stocks, with Nasdaq 100 constituents having seen more than $1.2 trillion in market capitalization erased. As fears deepen about the payoff of huge A.I. investment and that American technology giants could be losing their momentum, the Dollar stands to come under pressure.

Mid-term elections are coming up on Tuesday, and Traders are preparing for potential political gridlock amongst expectations that the Democrats will gain control of at least one chamber. Democrats are reportedly expected to push for stricter regulations surrounding A.I. technology, which could serve to amplify the concerns mentioned above, but this would likely have a meaningful impact on growth as some analysts believe that the U.S. economy is highly dependent on A.I. Military contractors, banks, and firms tied to cryptocurrencies could also face regulatory changes.

What to Watch This Week…

The complete Economic Calendar can be found here.

CHF

The Swiss Franc is the G10’s best performer against the Dollar this morning as it absorbs safe-haven flow amidst the tech sell off in the United States. Additionally, the Swiss National Bank reported a CHF 44.2 billion profit over the last nine months, driven primarily by gains in its foreign currency and gold holdings. This increases the likelihood of a payout to the Swiss government at the end of the year, which is structurally supportive of the Franc.

MXN

The Mexican Peso is down against the Dollar this morning despite preliminary Gross Domestic Product (GDP) figures for the third quarter coming in slightly above expectations at 3.2%. Quarter-over-Quarter growth was in line with expectations at 0.9%. The Peso is absorbing much of the selling pressure seen across Emerging Market currencies this morning, resulting from the tech sell-off and broader risk-off environment.