US Dollar Rebounds Above 98 Despite Ongoing Shutdown
The US Dollar Index (DXY) rose above 98 on Monday morning, despite lingering uncertainty surrounding the US government shutdown. The DXY briefly touched 98.05 in the Asian session, driven by technical recovery and anticipation of the release of the FOMC meeting minutes on Wednesday. However, strong expectations of the Fed's interest rate cuts in the next two meetings limited further dollar gains.
The US government shutdown entered its fifth day after the Senate failed to reach a budget agreement. President Donald Trump even threatened to begin laying off federal employees. Key data releases, such as the September employment report, were also delayed. Amid this chaos, market participants are predicting 25 basis point interest rate cuts in October and December, with a 95% and 83% probability, respectively.
Recent statements from Fed officials have been divided. Governor Stephen Miran supports an aggressive rate cut path, citing the impact of Trump's policies on the economy. However, Dallas Fed President Lorie Logan remains hawkish, highlighting non-residential services inflation, which she considers a concern. The cautious stance of the upcoming FOMC minutes could be key to the dollar's direction in the near future. (asd)
Source: Newsmaker.id
