Dollar Steady as Shutdown-End Hopes Support Risk Tone; Euro Rangebound, Pound Soft After Jobs Data.
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USD – Steady as shutdown resolution prospects improve sentiment; focus turns to CPI later this week.
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EUR – Stable but directionless; euro-zone growth still sluggish and sentiment tied to USD movement.
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GBP –Under pressure after rise in unemployment; modest support from firmer global risk appetite
USD:
The dollar is trading broadly steady this morning, consolidating ahead of Thursday’s U.S. CPI report, as investors weigh signs that the government shutdown may soon be resolved. Reports suggesting progress in congressional negotiations have slightly improved risk sentiment, easing demand for safe-haven assets but keeping the USD well-supported given firm U.S. yields.
The potential end to the shutdown removes one source of fiscal uncertainty, reinforcing confidence that near-term U.S. growth disruption will be limited. Nevertheless, traders remain cautious ahead of this week’s inflation data, which will be key in shaping expectations for the Fed’s December policy outlook.
Overall, the greenback continues to find underlying support from its yield advantage and resilient U.S. fundamentals. Unless CPI comes in notably soft or risk sentiment strengthens meaningfully, the USD is likely to stay within its recent firm range.
EUR:
The euro remains little changed in quiet early trade, with EUR/USD largely tracking dollar movements and broader risk tone. The absence of major euro-zone releases this week has left the currency directionless, while sentiment remains constrained by weak regional growth signals and subdued inflation momentum.
ECB officials continue to strike a balanced tone, noting tentative improvement in financial conditions but warning that recovery remains fragile. With no major policy or data catalysts in the near term, the euro is expected to remain rangebound, responding mainly to shifts in U.S. yields and dollar direction.
If the shutdown resolution lifts global risk sentiment and softens the USD slightly, the euro could edge higher, though structural headwinds continue to limit upside.
GBP:
Sterling remains soft following Tuesday’s labour-market report, which showed UK unemployment rising to 5%, reinforcing concerns about slowing economic momentum. The data prompted markets to price in a greater likelihood of Bank of England rate cuts in the first half of next year.
However, improved global risk appetite following U.S. shutdown-end hopes has helped limit further sterling losses for now. GBP/USD continues to trade near recent lows, with sentiment fragile amid weak domestic fundamentals and fiscal uncertainty ahead of the next Budget.
Unless U.K. growth and wage data show clear signs of stabilization, or the BoE pushes back on easing expectations, the pound is likely to remain under pressure — though a softer USD backdrop could offer brief relief.