U.S. Dollar Stability Faces Challenge Amid Government Shutdown Worries

The U.S. dollar maintained its stability on Tuesday as concerns grew over an imminent government shutdown that may disrupt the release of a key jobs report. Meanwhile, the Australian dollar emerged as the day's top-performing currency following cautious remarks on inflation by its central bank.

Investor attention is firmly on the looming U.S. government shutdown, with funding set to expire at midnight on Tuesday unless a temporary agreement is reached. A partial shutdown would delay important economic data releases, including the anticipated payrolls report, crucial for Federal Reserve policymakers.

Market sentiment reflects expectations of further U.S. rate cuts, while the dollar faces pressure from political uncertainty. The Japanese yen strengthened as investors wager on potential rate hikes by the Bank of Japan. Meanwhile, the sterling and euro showed nominal movements amid mixed European economic data.

(With inputs from agencies.)