Dollar rebounds, uncertainty reigns as US government stays shut
The dollar gained against the euro and yen on Thursday, with the greenback rebounding against the Japanese currency after four consecutive days of losses, as traders weighed the impact of a U.S. government shutdown.
The shutdown leaves a gap in government data, including the closely watched monthly jobs report for September that was due to be released on Friday.
A Chicago Fed report on Thursday, which combines private and available public data, estimated the September jobless rate was 4.3%, the same as in August and evidence that a feared rapid rise in unemployment had not yet begun.
But details of the report, along with other data, pointed to ongoing sluggishness in the labor market.
The dollar fell on Wednesday after the ADP National Employment report showed private payrolls decreased by 32,000 in September, boosting expectations that the Federal Reserve will cut interest rates two more times this year.
But the currency retraced that move on Thursday.
The dollar index was last up 0.13% on the day at 97.86. The euro fell 0.09% to $1.1719.
Traders see a 25-basis-point cut at the Fed’s October meeting as almost certain and are pricing in a 90% probability of an additional cut in December, according to the CME Group’s FedWatch Tool.
Dallas Fed President Lorie Logan on Thursday said the U.S. central bank appropriately cut rates last month to guard against the risk of a sharp deterioration in the job market, but said that so far the cooling has been gradual and signaled she is not eager to cut rates further.
Against the Japanese yen , the dollar strengthened 0.08% to 147.17.
Traders are watching this weekend’s election to lead Japan's ruling party for signs on how fiscal policy will influence the currency.
Sterling weakened 0.25% to $1.3443. Traders have started to assess the impact the UK November budget will have on the economy and sterling.
In cryptocurrencies, bitcoin gained 2.24% to $120,218.
Source : Reuters.com
