After four consecutive days of losses, the dollar initially slipped further on the back of a dismal ADP employment report, which showed private sector payrolls contracted by 32,000 jobs last month. Expectations had been for a 50,000 job increase. This miss added to growing sentiment that the Federal Reserve could deliver two more rate cuts this year.
Government Shutdown Complicates Fed Outlook
The market is now operating without key US economic releases, as the government shutdown halts the flow of federal data. This has forced traders to rely more heavily on private indicators such as the ADP and Challenger jobs reports, which are moving markets more than usual. The widely watched nonfarm payrolls report, scheduled for Friday, will not be released.
Investor uncertainty is being amplified by political developments, with President Trump’s administration freezing $26 billion in funding targeting Democratic-led states. Traders are also monitoring legal battles involving the Fed, including the Supreme Court’s decision to hear arguments on Trump’s attempt to remove Fed Governor Lisa Cook.
