The continued pressure from the US government shutdown is making the greenback weak and it hit the 100.15 mark on Wednesday. It appears that the shutdown is never-ending, as it has reached its 36th day. This is the second time such a lengthy shutdown has occurred under President Trump’s administration. Same duration shutdown took place in 2019 under his watch. In the midst of the chaos, there was some hope as legislators attempted to pass a temporary funding bill through the Senate, but they failed. Naturally, investors are becoming nervous, and they fear that it will continue for an even longer period of time, causing the US dollar to lose strength.
The Fed’s latest move isn’t helping much, either. The central bank cut rates again in October, landing at a range of 3.75% to 4.00%. But Fed Chair Jerome Powell made it clear—don’t count on another rate cut just yet. After his comments, the odds of a December cut dropped from 93% to 70%. That’s given the DXY a little bit of breathing room, but not much.
Now, everyone’s watching for key US economic numbers due out later today. Traders will get to see October’s private payroll data and the ISM Services PMI report. Analysts expect the ADP report to show 25,000 new jobs—better than last month’s loss, at least. If the numbers come in stronger than expected, the US Dollar might claw back some ground against other major currencies. But for now, the shutdown and all the political drama are keeping the dollar under pressure.
