Forex today: Uncertainty lingers as US government shutdown drags on

Market Snapshot: Dollar Under Pressure

The ongoing US government shutdown continues to cast a shadow over markets, undermining investor confidence in the dollar. As lawmakers failed to reach agreement, crucial economic releases, including weekly jobless claims and factory orders, have been postponed until funding is restored.

The USD Index slipped modestly, marking its fifth daily decline, as traders scaled back bets on the dollar amid rising political risk.

Historically, safe-haven appeal is countered by uncertainty over US fiscal policy and data gaps.

Key Data & Currency Moves

In the US, ADP private payrolls for September revealed a decline of 32,000 jobs, while the August print was revised downward from +54,000 to –3,000.

ISM Manufacturing PMI edged up to 49.1 in September (from 48.7), though pricing pressures eased, with the “Prices Paid” component easing.

Among major pairs:

EUR/USD traded near 1.1750 after failing to extend a midweek rally.

GBP/USD reclaimed the 1.3500 area, supported by resilience in the pound.

USD/JPY slipped further, dipping below the 147.00 mark, adding to a three-day losing streak.

Gold (XAU/USD) nudged near record highs, briefly testing resistance before settling in a narrow range.

What’s Behind the Moves: Risk Sentiment & Policy Gaps

With the US fiscal gridlock deepening, markets are increasingly pricing in “risk-off” dynamics: investors tilt toward safe havens, while dollar strength loses its lustre. The inability to deliver timely data has amplified volatility and raised bets on delayed policy responses.

In Europe and the UK, central bank tone and macro releases add layers of complexity. The euro retains some support amid easing inflation expectations, while the pound benefits from glimmers of strength in UK fundamentals.

What to Watch Next

Challenger Job Cuts (September): With standard reports delayed, this labour indicator will be a focal point for global markets.

Fiscal developments in Washington: Any signs of a breakthrough or continued stalemate could trigger sharp swings in currency markets.

Eurozone & UK data: Releases such as unemployment, inflation, or PMI prints could alter the landscape for EUR/USD and GBP/USD.

Bottom Line

The prolonged US government shutdown is feeding market jitters, dampening demand for the dollar and boosting safe-haven flows. As calendar gaps widen and data delays persist, traders will be on high alert for any signals from Washington or surprise macro prints. In this environment, volatility and fast re-pricing are the norm — positioning remains key.

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