New York, October 17 (QNA) - The US dollar weakened on Saturday and was heading for its first weekly decline in more than a month against the euro and Japanese yen, as expectations of further Federal Reserve interest rate increases eased and investors remained concerned about an artificial intelligence-driven sell-off in equities.

The dollar index, which measures the US currency against six major peers, fell 0.17% to 101.87, putting it on track for a weekly loss of 0.35%.

Sterling rose 0.31% to $1.3314, gaining 0.63% over the week, while the dollar slipped 0.25% against the Swiss franc to 0.8228, leaving it down 0.67% for the week.

The euro gained 0.08% to $1.1227, following a 0.56% rise on Thursday, its biggest daily gain in two months. It was on course for a weekly advance of 0.23%.

Against the Japanese yen, the dollar fell 0.08% to 158.11, heading for a weekly decline of 0.13%. The yen had weakened for four consecutive weeks, supported in part by the impact of the US-Israeli war on Iran on demand for the dollar.

Shares of AI-related companies fell sharply this week, with concerns spreading into parts of the credit market. Investors are increasingly worried that data center operators may struggle to generate sufficient profits in time to repay their debts.

Meanwhile, investors expect US President Donald Trump to avoid further escalation in the Middle East or Ukraine, amid concerns that widening conflicts could fuel inflation and undermine his standing ahead of the US midterm congressional elections. (QNA)