Dollar Weakens Amid Shutdown Worries; Aussie Leads
A dollar gauge weakened to lowest in a week as data showed ebbing demand for workers as well as a decline in consumer confidence in the US. The US government veers toward a shutdown, which will potentially delay the release of a key labor report later in the week. The Australian dollar outperforms its peers in the Group of 10 against the greenback.
The Bloomberg Dollar Spot Index fell 0.2% to lowest in a week
The index is set for its longest losing streak since Sept. 1, nearly flat on the month
The gauge is ending 3Q with a gain of 0.9%, the first quarterly advance this year, supported by a jump in July
US job openings were little changed in August while hiring was subdued; US consumer confidence fell in September to a five-month low on growing concerns about job prospects and the broader economy
President Donald Trump threatened to fire scores of federal workers as the US hurtles toward a shutdown with Democrats and Republicans at an impasse to fund the federal government
The greenback drifted lower both during the impasse and in the immediate aftermath of the previous three shutdowns
“It is becoming increasingly likely that it will happen, so expect some further USD losses in the overnight session,” Mario Schimmels, an analyst at DZ Bank AG, said about the shutdown
“Dollar weakness is evident immediately before/after shutdowns typically precedes range-trading,” Citigroup analysts wrote in a note. “The dollar tends to strengthen once shutdowns are resolved”
“We think that for those wishing to hedge a prolonged shutdown, precious metals may offer more reliable hedge than the dollar,” they said, adding that the length of the shutdown is key
AUD/USD rose 0.6% to 0.6614. The Reserve Bank of Australia left the official cash rate unchanged at 3.6% and said that inflation in the September quarter may be higher than previously expected
USD/JPY fell 0.5% to 147.86
EUR/USD gained 0.1% to 1.1738
French inflation picked up on an acceleration in the services sector and smaller declines in energy prices, though remained well below the ECB’s 2% target
EUR/CHF fell 0.1% to 0.9345; the SNB made its most significant sales of the franc in more than three years in the second quarter
USD/CAD was little changed at 1.3918, lagging many peers in G-10
Source : Bloomberg.com
