Wednesday, 01 October 2025
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Dollar Plummets, Market Awaits Shutdown and Fed Policy
Wednesday, 1 October 2025 08:18 WIB | US DOLLAR |DOLLAR

The US dollar continued to weaken, approaching its lowest level in a week as uncertainty over a possible US government shutdown looms. If the US government does shut down, the release of key data, such as Friday's jobs report, could be delayed, heightening market caution.

US President Donald Trump warned that a shutdown would force the government to take "irreversible" steps, including shutting down critical programs. Meanwhile, recent data showed the US labor market is starting to weaken, with a decline in the number of workers employed despite a slight increase in job openings.

In the foreign exchange market, the dollar briefly hit its lowest level against major currencies like the euro and the yen, although the yen strengthened after three days of weakness. Traders are also starting to ignore the Japanese business sentiment survey (tankan), usually a key indicator of Bank of Japan (BOJ) interest rates, as their attention is now focused on potential monetary policy decisions in the US and Japan.

Despite this, the market still places a 97% probability that the Federal Reserve will cut interest rates by 0.25 percent later this month. Meanwhile, the market is also starting to factor in the possibility of an interest rate hike from the Bank of Japan at the end of October, adding to uncertainty amid US political turmoil. (Ads)

Source: Newsmaker.id

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