AI's Ripple Effect: Market Jitters and Currency Fluctuations

The emergence of China's DeepSeek AI has influenced global currency and equity markets. The yen lost some safe-haven gains, while U.S. tech stocks, including Nvidia, faced sell-offs. Tariff threats from President Trump have further impacted currencies like the euro. Market participants await signals from the Federal Reserve and U.S. Treasury Secretary.

Global markets are in a state of flux as investors respond to the launch of China's DeepSeek AI model. This new technology, leveraging lower-cost chips and minimal data, prompted shifts in currency values, notably weakening the yen against the dollar, as well as causing significant sell-offs in U.S. tech stocks, impacting shares like Nvidia.

Investor sentiment was further rattled by fresh tariff threats from President Donald Trump, impacting the euro's value ahead of an imminent European Central Bank policy meeting. The President has proposed tariffs on key imports such as computer chips, aiming to boost domestic production.

Amidst these developments, financial markets are closely monitoring the Federal Reserve's two-day meeting for any potential adjustments in interest rates, while also seeking clarity on U.S. economic policy directions under newly appointed Treasury Secretary Scott Bessent.

(With inputs from agencies.)