Dollar Dips Amid U.S. Shutdown and Weak Jobs Data
The dollar reached a near one-week low as traders assessed the impact of a U.S. government shutdown and weak jobs data. The Federal Reserve is anticipated to cut interest rates twice more this year. Meanwhile, the euro rose as eurozone inflation increased, supporting the European Central Bank's cautious approach.
The U.S. dollar dropped to its lowest point in nearly a week as traders evaluated the consequences of a national government shutdown and disappointing employment data. With expectations of two more Federal Reserve interest rate cuts this year, the dollar index fell by 0.2% to 97.52.
Traders were mulling over the potential duration of the U.S. shutdown and its effect on economic data releases, as private employment numbers plummeted by 32,000 in September. This comes after a revised decline of 3,000 in August, far below the anticipated increase of 50,000 jobs, which contributed to the dollar's recent decline.
The government shutdown has also stymied federal economic data releases, exacerbating uncertainty among policymakers. The Trump administration froze $26 billion in funds for Democratic-leaning states, leveraging the shutdown to target Democratic priorities. Meanwhile, the euro saw a 0.2% increase to $1.1756 amid accelerating eurozone inflation, strengthening ECB's cautious monetary policy stance.
(With inputs from agencies.)
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