Swiss Franc, Yen Surge 1% as DeepSeek AI Rocks U.S. Tech

The Swiss franc and Japanese yen strengthened against the U.S. dollar, driven by a broad flight to safety after Chinese startup DeepSeek's new artificial intelligence model cast doubt on American technological dominance and triggered a sell-off in U.S. tech stocks.

Market turbulence hit equity indices hard, with Nasdaq futures tumbling by about 4% as investors reassessed valuations and growth trajectories for major U.S. technology firms. Currency markets reacted immediately to the equity sell-off, steering capital away from the dollar and into traditional safe-haven assets.

"If technology dissemination is more global and reduces a U.S.-specific technological advantage, the impact should be considered to be a marginal dollar negative," said George Saravelos, forex analyst at Deutsche Bank.

Foreign exchange movements reflected shifting risk sentiment across global trading desks. The USD/JPY exchange rate fell 1.1% to 154.009, touching a near six-week low of 153.723 during the session, while the EUR/CHF dropped 0.5% to 0.9450.

Safe-haven currencies typically benefit during periods of acute equity market stress, as global investors rapidly reduce risk exposure. The sudden emergence of a competitive, lower-cost AI model from China challenges the capital expenditure assumptions underpinning the multi-year rally in U.S. mega-cap technology shares.