Government Deadlock Adds to Market Uncertainty
The shutdown, entering its third day after lawmakers failed to pass a funding bill, has already delayed key economic releases, including the September Nonfarm Payrolls.
With no weekend session scheduled and further gridlock expected, the lack of clarity on fiscal policy and economic data is weighing on sentiment, keeping the dollar under pressure.
Weak Jobs Data Fuels Rate Cut Bets
Fresh signs of labor market weakness added to the dollar’s woes. The ADP report showed private-sector payrolls fell by 32,000 in September, after a revised 3,000 drop in August, well below forecasts for a 50,000 gain.
According to CME FedWatch, traders now see near-certain odds of a 25 basis-point cut in October and another in December.
Fed officials remain cautious. Dallas Fed President Lorie Logan said the September cut was justified but warned against rushing further easing. Stronger PMI readings later Friday could offer temporary relief, but the broader outlook for the dollar remains bearish amid policy uncertainty and labor market concerns.
