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FX Today: The US government shutdown and its implications steal the headlines

Further weakness saw the US Dollar (USD) recede to new multi-day lows as investors evaluated the US federal government shutdown, which in turn reignited uncertainty in the global markets ahead of the key US data releases.

Here’s what to watch on Thursday, October 2:

The US Dollar Index (DXY) lost ground for the fourth straight day, revisiting the 97.50 zone amid steady uncertainty surrounding the US government shutdown. The usual weekly Initial Jobless Claims won’t be released in light of the ongoing federal shutdown, while uncertainty remains in place around the publication of Challenger Job Cuts and Factory Orders. On the Fed side, L. Logan is due to speak.

EUR/USD briefly rose to multi-day highs near 1.1780 before surrendering much of those gains on a late recovery in the Greenback. The Unemployment Rate in the euro area is due ahead of speeches by the ECB’s Montagner and De Guindos.

GBP/USD advanced sharply, managing to surpass the 1.3500 hurdle to hit fresh five-day peaks. The BoE will publish its Decision Market Panel (DMP) survey.

Extra appreciation of the Japanese yen dragged USD/JPY to new two-week troughs near 146.60. Foreign Bond Investment figures and the Consumer Confidence gauge are next on tap on the domestic calendar.

AUD/USD extended its move higher, rising marginally beyond the 0.6600 barrier. The Balance of Trade results are due, along with Household Spending prints and the RBA’s Financial Stability Report (FSR).

Prices of WTI retreated further and reached new five-month lows around $61.40 per barrel on Wednesday, as market participants kept evaluating the OPEC+ plans to hike oil output while demand concerns also added to the widespread decline of the commodity.

Gold prices advanced to the boundaries of the $3,900 mark per troy ounce, hitting an all-time high on the back of further weakness in the greenback, declining US yields and swelling uncertainty after the US government shutdown. Silver prices followed suit, reaching new highs near the $48.00 mark per ounce for the first time since May 2011.

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Pablo Piovano

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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