US Dollar dives as Nvidia trigger a valuation risk

US Dollar Skipped as Safe Haven, AI Valuation Concerns Weigh on Equities
The US Dollar Index (DXY) weakened despite safe-haven inflows, as investors sought refuge in US Treasuries and the Japanese Yen. This comes amid concerns over AI valuations after a Chinese startup launched an open-source AI module, potentially impacting major players like Nvidia.

Tariff Threats:

US Dollar weakness was also fueled by renewed tariff threats from the US President against Colombia over immigration disputes.

Equity Market Turmoil:

US equities declined, with tech stocks taking a significant hit, particularly Nvidia, which saw a steep drop in its share price, wiping out a substantial portion of its market capitalization.

Economic Data & Fed Watch:

The Chicago Fed National Activity Index showed a slight improvement. Markets are awaiting the Fed’s interest rate decision on Wednesday, with expectations for a hold. The US Treasury will hold several bond auctions today.

DXY Technical Outlook:

The DXY is facing downward pressure. Key support levels are 107.56 and 106.52, while 108.00 and 109.29 represent key resistance levels.