Last week, the financial markets made a dramatic U-turn, as many key global stock indexes recorded substantial gains. Despite underlying concerns, the looming issue of US debt ceiling seems on track to be resolved, thus avoiding a default. US Treasury Secretary Janet Yellen's explicit warnings appear to have had the intended effect. Simultaneously, NASDAQ's significant gains suggest that investors are betting heavily on a future propelled by generative AI. It is evident that the world is entering an AI era, where massive productivity gains and profit growth come from embracing these transformative technologies. This optimistic sentiment has overshadowed concerns about protracted policy tightening by major central banks and the prospect of a long-term high-interest-rate environment. Even fears of a potential recession, whether in the US or globally, seem to have been temporarily set aside. In the forex arena, commodity currencies stole the show as they closed the week on a high note, as the best performers. New Zealand Dollar emerged as a frontrunner, outpacing its counterparts, Canadian and Australian Dollars. On the flip side, the Japanese Yen found itself on shaky ground, earning the unenviable title of the week's weakest currency. Trailing close behind Yen, European majors had lackluster performance. Dollar, meanwhile, attempted to uncouple itself from its conventional inverse relationship with risk trends. Despite these efforts, it struggled to sustain any substantial follow-through, indicating the continued influence of global risk sentiment on the currency's performance. | 