Dollar remains resilient while Trump eases on tariffs

The longest federal shutdown in US history finally drew to a close last week, as a deal between the Democrats and Republicans was struck that will fund the government through at least January. The very sparse private data published over the last two weeks suggests that net job creation has dried up recently, albeit there is still little sign of mass dismissals. The dollar has proven resilient, however, shrugging off both the uncertainty and the tentative evidence of a labour market cooling, in no small part due to the Federal Reserve's recent hawkish turn.

Another notable development is Trump's willingness to ease tariffs in order to try and lower the cost of living, an implicit acknowledgement that tariffs are inflationary, and that the average tariff level is more likely to move down than up over the medium term. As mentioned, all eyes this week will be on the long-awaited release of the September payrolls report, which will be out on Thursday, as opposed to the typical Friday release.