US Dollar Index (DXY) picks up on risk-aversion nearing the 100.00 level

• The Dollar bounced up at the 99.65 area and reached 99.85 highs in risk-off markets.
• Fears of an AI bubble have sent equity markets tumbling in the US and Asia.
• Downbeat private US employment reports have increased investors' aversion to risk.

The US Dollar trims losses on Friday with investors wary of risk following another sell-off on Wall Street, as concerns of an AI bubble remain alive. The USD Index, which measures the value of the Dollar against a basket of peers, is trading at 99.85 in the early European session, up from weekly lows around 99.65.

The Greenback drew some support from risk aversion as Asian markets followed Wall Street and posted significant losses, with tech stocks leading the drawdown. Fears of a dotcom-like crash, coupled with downbeat employment data from the US, have triggered a rush for safety that is underpinning demand for the US Dollar.

Further signals of the US labour market's deterioration

In the US, two private employment reports increased concerns about the labour market, offsetting the moderate optimism triggered by Wednesday's ADP Employment figures. 

Data released by  Revelio Public Labor Statistics showed that net employment declined by 9,100 in October, with public sector jobs dropping from 22,000. The outplacement firm Challenger, Gray & Christmas, stated that job cuts increased to 153,074 in October, to their highest level in 22 years, as businesses cut costs and adopt AI technologies.

The key Nonfarm Payrolls report will be delayed for the second consecutive month, as the US government shutdown extends for its fifth week. The focus today, thus, is on a slew of Federal Reserve (Fed) speakers and the preliminary Michigan Consumer Sentiment Index, which is expected to have deteriorated slightly in November.