AI concerns trigger risk aversion, causing the dollar and US Treasury yields to fall simultaneously

1. The US Dollar Index fell 0.2% in Asian trading on Friday to 101.69, but is still up 0.3% so far this month and looks set to record gains for a second consecutive month. 2. The US dollar was mainly dragged down by falling US Treasury yields, as safe-haven assets attracted new buying flows. The yield on 10-year US Treasuries once dropped 1% to 4.884%, marking a new low since September 10. Earlier this week, the Alphabet earnings report reignited market concerns about AI spending, triggering selling pressure in the stock market and making safe-haven bonds more appealing.3. The 30-year yield once fell to 5.2623%, hitting its lowest level in over a month. OCBC FX strategist Sim Moh Siong pointed out that the market's response seems to differ from the usual risk-aversion driven by energy factors: AI concerns centered on the US have not supported the dollar nor pushed US Treasury yields higher. Instead, they have coincided with lower Treasury yields and overall dollar weakness.