FX.co ★ Dollar Stabilizes as Govt Shutdown Looms

The dollar index remained near the 98 mark on Tuesday following a decline over the previous two sessions. This performance occurs amid concerns about a potential federal government shutdown, as the October 1 funding deadline draws near. Such a shutdown could delay the release of significant economic data this week. This situation arises from President Donald Trump's limited progress in securing a temporary spending deal with his political opponents. Market participants are now focusing on the upcoming nonfarm payrolls report for September, set for release on Friday, which will provide insights into the labor market dynamics, alongside job openings, private payrolls, and the ISM manufacturing PMI data. On Monday, John Williams, the President of the New York Federal Reserve, mentioned that initial signs of a weakening labor market were a factor behind his support for last month’s interest rate reduction. Current market sentiment indicates anticipation of another quarter-point rate cut in October, with expectations of approximately 42 basis points of additional easing by the end of the year.