FX.co ★ Dollar Hits 2-Month High on Haven Demand

The dollar index surged toward 99 on Wednesday, reaching its highest point in two months, driven by continued concerns regarding the economic repercussions of the ongoing US government shutdown. As the shutdown progresses into its second week without a clear resolution in sight, the outlook remains uncertain, with significant delays in key data releases and mounting pressure on policymakers to reach an agreement. On the monetary policy front, the Federal Reserve is anticipated to implement a quarter-point rate cut this month, with a further reduction expected in December. Market participants are now focused on the FOMC minutes and remarks from several Federal Reserve officials, including Chair Jerome Powell, for insights into policy directions. The dollar exhibited significant gains against the New Zealand dollar following an unexpected 50 basis point rate cut by the Reserve Bank of New Zealand. Additionally, it strengthened against major currencies in light of political uncertainties in France and Japan.