Dollar set for weekly loss as Fed hike bets fade, AI clouds outlook

The dollar's first weekly drop in over a month reflects fading Fed hike odds, with markets pricing an 85% probability of a hold, while the pound and franc lead gains. Simultaneously, AI-linked equity weakness is bleeding into credit, offsetting rate-driven dollar support. Near term, this pressures the greenback and keeps FX volatility elevated, while risk-sensitive assets stay vulnerable to further AI profitability concerns.