Wednesday marks the fourth day in a row that the USD has lost ground.
The continued decline is exacerbated by the US government shutdown and Fed rate decrease speculations.
The US ISM Manufacturing PMI and the US ADP report are looking for short-term stimulus.
Heading into Wednesday's European session, the US Dollar Index (DXY), which measures the Greenback against a basket of currencies, is still seeing some selling pressure for the fourth day in a row and has fallen to a one-week low. The index is currently down around 0.35% for the day, trading in the mid-97.00s, and appears susceptible to further declines due to a number of unfavorable variables.
Even though Jerome Powell, the chair of the Federal Reserve (Fed), has been cautious, traders have been factoring in the likelihood that the US central bank will lower interest rates twice this year. Indeed, according to the CME Group's FedWatch Tool, there is a nearly 95% chance that rates will be lowered at the next FOMC meeting in October, and there is a more than 75% chance that rates will be lowered again in December. This further weakens the USD and confirms the short-term pessimism, as does a partial closure of the US government.
The US government was forced to begin closing down operations at 4:00 GMT on Wednesday after a Republican spending package failed to pass the Senate on Tuesday. A government shutdown will probably cause major US macro releases, such as Friday's highly anticipated US Nonfarm Payrolls (NFP) report, to be delayed. A protracted closure, meanwhile, would negatively impact economic performance, supporting the argument for more short-term USD declines.
For some motivation later in the North American session, traders now await the release of the US ISM Manufacturing PMI and the US ADP report on private-sector employment. In addition, speeches by prominent FOMC members may help create chances for short-term trading around the USD.
This week's US dollar price
The continued decline is exacerbated by the US government shutdown and Fed rate decrease speculations.
The US ISM Manufacturing PMI and the US ADP report are looking for short-term stimulus.
Heading into Wednesday's European session, the US Dollar Index (DXY), which measures the Greenback against a basket of currencies, is still seeing some selling pressure for the fourth day in a row and has fallen to a one-week low. The index is currently down around 0.35% for the day, trading in the mid-97.00s, and appears susceptible to further declines due to a number of unfavorable variables.
Even though Jerome Powell, the chair of the Federal Reserve (Fed), has been cautious, traders have been factoring in the likelihood that the US central bank will lower interest rates twice this year. Indeed, according to the CME Group's FedWatch Tool, there is a nearly 95% chance that rates will be lowered at the next FOMC meeting in October, and there is a more than 75% chance that rates will be lowered again in December. This further weakens the USD and confirms the short-term pessimism, as does a partial closure of the US government.
The US government was forced to begin closing down operations at 4:00 GMT on Wednesday after a Republican spending package failed to pass the Senate on Tuesday. A government shutdown will probably cause major US macro releases, such as Friday's highly anticipated US Nonfarm Payrolls (NFP) report, to be delayed. A protracted closure, meanwhile, would negatively impact economic performance, supporting the argument for more short-term USD declines.
For some motivation later in the North American session, traders now await the release of the US ISM Manufacturing PMI and the US ADP report on private-sector employment. In addition, speeches by prominent FOMC members may help create chances for short-term trading around the USD.
This week's US dollar price
