US dollar slips on Iran tensions and AI risks

The US dollar fell alongside lower oil prices and Treasury yields on Tuesday as traders evaluated rising tensions with Iran and potential risks to the artificial intelligence sector. Meanwhile, the yen advanced following strong demand at a Japanese bond auction.

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Banknotes of Japanese yen and U.S. dollar are seen in this illustration picture taken September 23, 2022. REUTERS/Florence Lo/Illustration

The United States dollar fell 0.25% to 101.71 on Tuesday as falling Treasury yields and shifting energy prices offset earlier inflation gains. The drop reflects investor caution over rising geopolitical tensions involving Iran and the sustainability of massive capital inflows into AI sectors. Markets are weighing whether higher oil prices will ultimately constrain the broader technology trade.

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