
• Question now is how long will it last
USD decline continued yesterday despite JOLTS job openings for August coming in better than expected and the layoff number lower than forecast. Market concerns remained around the possibility of the US government going into shutdown, which in turn will delay the release of jobs data later in the week.
Higher CPI numbers from Germany backed the current market pricing of no rate cuts expected by the ECB. Today we've got CPI numbers from the EU.
BoE member Sarah Breeden sent out a dovish message to markets warning that leaving interest rates high for too long carries its own risks to the economy
*Daily move - against G10 rates as of 06:00 BST, 01.10.25
** Indicative rates - interbank rates as of 06:00 BST, 01.10.25
With no last minute deal materialising, the US government shutdown is now in effect. The question now is how long will the shutdown last.It stands to reason that a prolonged shutdown could contribute to a softer US dollar. In the absence of Friday’s payroll data, today’s focus may shift to the ISM manufacturing release and the ADP payroll figures for further market direction.
Attention will turn to the release of EU CPI figures in the morning, which are expected to set the tone for early market movements. We anticipate developments to mirror those seen yesterday, with German CPI data serving as the primary reference point.
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