FX.co ★ Dollar Continues to Strengthen

The dollar index remained near its three-month peak around 99.9 on Monday, as traders anticipated significant private-sector data releases this week. These are expected to offer new insights into the labor market and the broader US economy amidst an ongoing government shutdown, now in its second month without any signs of resolution. The recent ISM Manufacturing PMI revealed a sharper-than-anticipated contraction in the manufacturing sector coupled with a slowdown in price pressures. Investors are now focusing on the forthcoming ADP employment report and Challenger job cuts data to gain a clearer understanding of labor market trends. Market participants currently estimate nearly a 70% chance that the Federal Reserve will lower the federal funds rate by 25 basis points in December. This expectation follows the cautious stance expressed by Chair Powell during the post-FOMC press conference. The US dollar showed strength, trading mostly higher against both the Swiss franc and the Canadian dollar.