The U.S. dollar fell to its lowest level in a week against major currencies on Wednesday after the U.S. government entered a federal shutdown, threatening delays in the release of crucial economic data, including the monthly jobs report.
اضافة اعلان
Government funding expired at midnight in Washington (04:00 GMT) after Republicans and Democrats failed to reach a last-minute temporary agreement.
The Dollar Index, which measures the performance of the U.S. currency against six major currencies, dropped 0.2% to 97.635, marking its lowest level since last Wednesday.
Direct Impact on Data Releases
The U.S. Departments of Labor and Commerce announced that their statistical agencies would halt data releases during the partial shutdown. This includes the nonfarm payroll report scheduled for Friday, closely watched by markets to gauge the likelihood of a Federal Reserve rate cut later this month.
In the absence of official data, attention will shift to private-sector indicators, such as the ADP employment report due later Wednesday.
Markets See Rate Cut as Almost Certain
Dollar pressure increased following mixed readings from the JOLTS report released Tuesday, which showed a marginal rise in job openings and a decline in hiring, signaling a softening U.S. labor market.
London Stock Exchange data indicates traders now see a 95% probability of a 25-basis-point Federal Reserve rate cut at its October 29 meeting.
Joseph Capurso, Head of FX Markets at Commonwealth Bank of Australia, warned: “The dollar will continue to decline today if political statements indicate a prolonged shutdown… and further weak U.S. economic data could increase dollar pressure.”
Euro Rises, Yen Ignores Tankan Survey
The euro rose 0.3% against the dollar to $1.1767, its highest since September 24.
Meanwhile, the dollar fell 0.3% against the Japanese yen to 147.46, continuing a three-day decline totaling 1.2%. Traders largely ignored the Bank of Japan’s quarterly Tankan survey, which showed improved confidence among large manufacturers. While the survey is a key factor in timing interest rate hikes, markets are focused on U.S. developments.
Bank of Japan officials have recently signaled a shift toward tighter policy. Traders currently assign a roughly 40% chance of a 25-basis-point rate hike in Japan on October 30, though economists note the decision will depend primarily on the Fed’s economic outlook.
–(Agencies)
