FX.co ★ Dollar Remains on the Back Foot

The dollar index experienced a modest decline for the fifth consecutive session, settling at approximately 97.6 on Thursday. Investors remain focused on the potential for additional Federal Reserve interest rate cuts within the year, while also dealing with the repercussions of the ongoing government shutdown and the resulting delays in the release of crucial economic data. Notably, the weekly jobless claims were not issued, and there is a strong likelihood that tomorrow's employment report from the Bureau of Labor Statistics will also be postponed due to insufficient funding, as lawmakers have been unable to agree on a stopgap spending measure. Despite these concerns, the markets have largely remained unconcerned for the time being, anticipating further developments and hopeful that the deadlock will be resolved swiftly. Concurrently, data from Challenger, Gray & Christmas indicated a decrease in job cuts for September, whereas the ADP report highlighted a reduction of 32,000 jobs in the private sector—the most significant drop since March 2023. Currently, money markets have almost fully factored in another quarter-point rate cut by the Federal Reserve this month, with an 80% probability of an additional decrease in December.