The US dollar strengthened slightly for the first time in a week. The trigger: the high probability that the US shutdown will end soon, so the market is hoping for economic data releases (such as NFP, CPI, etc.) to resume. The Bloomberg Dollar Spot Index rose 0.1%, while Treasury futures contracts were relatively flat as bond markets were closed for the US holiday. The yen was the weakest among the G10.

The 1-month option price for the Bloomberg Dollar Spot Index rose to its highest level in almost a week, a sign the market is bracing for volatility when the data returns. The Senate has passed a temporary funding package, supported by eight centrist Democrats, setting the stage for the government to reopen soon. Credit Agricole said this news provides a small boost to the USD, but the dollar funding pressures that emerged during the shutdown could also ease once the government reopens, potentially holding back further USD gains.

Regarding the data schedule, Morgan Stanley expects September Payrolls to be released approximately three business days after the shutdown ends. Other major September data will require an additional one to two weeks. For October's data, the process is likely to take longer due to disruptions in data collection—it may even not even make it into the December FOMC meeting. This means the USD received a short-term boost, but its subsequent direction will depend heavily on the quality (and timing) of the data that is ultimately released. (az)

Source: Newsmaker.id