Global Currencies Firm Amid U.S. Economic Concerns

The Japanese yen and Swiss franc gained strength against the dollar as investors sought safer assets following a sharp selloff on Wall Street. Concerns about U.S. economic stability and tech sector valuations, exacerbated by weak manufacturing data, drove market volatility ahead of crucial payroll data.

The Japanese yen and Swiss franc strengthened against the dollar on Wednesday as investors gravitated towards safer assets after a sharp selloff on Wall Street. This was triggered by apprehensions regarding the U.S. economy and tech sector valuations, following soft U.S. manufacturing data that fueled fears of an economic downturn.

U.S. equity indexes fell on Tuesday, with AI chip giant Nvidia dropping nearly 10%. This risk-averse sentiment extended to Asian and European markets on Wednesday. 'It's reminiscent of the early August selloff, where you didn't need a specific trigger. The highs in risky assets were enough,' said Alex Jekov, head of G10 FX strategy at BNP Paribas.

The yen rose as much as 0.4% to 144.89 per dollar before stabilizing around 145.195, following a 1% rally overnight. Meanwhile, the odds of a 50-basis point Federal Reserve rate cut this month increased to 37%, up from 30% the previous day, as traders focused on upcoming U.S. job data.

(With inputs from agencies.)