The Dollar Achieves Best Weekly Performance Since November, Yen Rises Ahead of Japanese Elections

The dollar approached its highest levels in two weeks on Friday, heading for its strongest weekly performance since November, amid a sharp decline in technology stocks due to investor concerns over significant spending on artificial intelligence and its potential impacts on various sectors.

In contrast, the Japanese yen rose ahead of the national elections scheduled for Sunday.

The dollar had risen since U.S. President Donald Trump announced the nomination of "Kevin Warsh" for the position of Federal Reserve Chair last week, while markets expect that he will not pressure for interest rate cuts, easing concerns about the independence of the U.S. central bank.

The decline in technology stocks came after investors expressed concerns over massive spending on advanced artificial intelligence tools, while the tendency of investors to avoid risks supported the dollar, despite a drop in U.S. Treasury yields following data showing a weaker labor market than expected, ahead of the January job report.

The dollar index, which measures the performance of the U.S. currency against six major currencies, rose to 97.961, near its highest level since January 23, and is heading for a weekly increase of 1%, its largest gain since mid-November.

In Japan, the yen rose to 156.74 ahead of the national elections, which are expected to be won by Prime Minister Sanae Takachi.

As for other currencies, the euro reached 1.1784 dollars after the European Central Bank kept interest rates unchanged and downplayed the impact of dollar movements on its future decisions.

In contrast, the British pound experienced sharp losses and stabilized at 1.3520 dollars after falling nearly 1% in the previous session, with the Bank of England keeping interest rates unchanged after a close vote of 5 to 4.

In the cryptocurrency market, Bitcoin rose by 1.5% to $64,158 in volatile trading, after the currency earlier recorded its lowest level since October 2024 at $60,017, but is heading for a weekly decline of 16%, its largest drop since November 2022.