BUZZ-COMMENT-US recap: Dollar mixed as risk aversion slams tech

Jan 27 (Reuters) – The dollar index fell with Treasury yields on Monday as concerns about China challenging U.S. AI dominance weighed on technology stocks.

The yen and Swiss franc held earlier gains as havens to the tech market sell off.

Chinese startup DeepSeek, the company threatening U.S. rivals with a low cost AI model, said it will temporarily limit registrations due to a cyberattack.

Risk aversion and a strong 5-year auction sent U.S. Treasury yields lower though U.S. new homes sales exceeded expectations and the Dallas Fed manufacturing index improved in January.

Focus midweek is on tech earnings, Q4 GDP, and the outcome of Wednesday’s Fed policy meeting. The U.S. central bank is seen holding it policy rate steady at 4.25%-4.5%.

EUR/USD pared gains after rising above its 20-day upper Bollinger to a 1-1/2-month high of 1.0535. The European Central Bank is expected to lower its policy rate by 25 basis points on Thursday, potentially hampering bullish momentum. A rise above 1.06 is considered bullish with nearby support seen at 1.0450.

GBP/USD was little changed on the session. A dearth if U.K. data this week will likely see the pair move according to month-end flows and U.S. risks. British Prime Minister Keir Starmer and U.S. President Donald Trump agreed to meet soon after a cordial call on Sunday.

USD/JPY steadied above its daily cloud top at 153.88 as downward momentum stalled and a spike in yen volatility abated. The pair needs to eclipse its 55-DMA at 154.97 to neutralize bears. Japan will eye services PPI on Tuesday.

Treasury yields fell 7 to 10 basis points. The 2s-10s curve was down about 1 basis point to +33.7bp.

The S&P 500 slid 1.8% fueled by falling tech shares.

Oil fell about 2.3% pressured by demand worries amid sliding equity prices.

Gold fell 1.2% while copper slid 2.5% as weak China manufacturing data sparked demand worries ahead of the Lunar New Year holiday.

Heading toward the close: EUR/USD -0.08%, USD/JPY -1.04%, GBP/USD +0.05%, AUD/USD -0.49%, DXY -0.04%, EUR/JPY -1.07%, GBP/JPY -1.00%, AUD/JPY -1.48%.

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(Editing by Burton Frierson
Reporting by Robert Fullem)

((robert.fullem@thomsonreuters.com;))