Tech rotation impacts dollar as AI sentiment shifts affect indices

Market sentiment shifts in technology stocks are creating ripple effects across forex markets, with the US Dollar Index fluctuating near 106.50 as investors reassess AI-driven equity valuations. The Nasdaq 100's 0.8% decline amid profit-taking in tech giants has prompted flows into safe-haven assets, benefiting gold which rose to $2,650/oz and silver advancing to $31.20/oz. The S&P 500's more modest 0.3% decline reflects broader market resilience outside tech sectors. This rotation has implications for dollar strength, as reduced risk appetite typically supports the greenback against higher-yielding currencies. However, concerns about overvaluation in US equities could limit dollar gains if international investors reduce exposure. Technical analysis shows DXY facing resistance at 107.00, with support at 106.20. The ongoing tech sector reassessment may continue influencing currency flows, particularly affecting risk-sensitive pairs as markets navigate year-end positioning adjustments.