The U.S. dollar tried to end a four-day losing streak on Thursday after the Supreme Court announced it will hear arguments in January over President Donald Trump’s attempt to remove Federal Reserve Governor Lisa Cook. For now, Cook will remain in her position. Market concerns about the Fed’s independence are likely to ease until the hearing, according to Tony Sycamore, market analyst at IG in Sydney.
Earlier strength in the greenback faded, with the U.S. Dollar Index – which tracks the dollar against six major currencies – reversing a 0.1% gain to trade flat at 97.74.
Traders are now focused on the length of the U.S. government shutdown, its effect on economic data releases, and the impact on upcoming Fed decisions. “We’re in a bit of a void,” Sycamore said, noting that meaningful data may not return until October 13.
The shutdown has halted the flow of federal economic reports at a time of political tension. On Wednesday, the Trump administration froze $26 billion in funding for Democratic-leaning states, escalating the standoff. According to betting platform Polymarket, most investors expect the shutdown to last one to two weeks, though there is a 34% chance of it dragging on longer.
Meanwhile, private payroll data from ADP showed U.S. jobs unexpectedly fell by 32,000 in September after a revised 3,000 drop in August. With the official nonfarm payroll report delayed by the shutdown, investors turned to the ADP release for clues on labor market health.
Manufacturing activity in the U.S. edged higher in September, but new orders and employment remained weak as factories felt the strain of Trump’s tariffs.
Markets are nearly certain that the Federal Reserve will cut rates at its October meeting. Fed funds futures now imply a 99% probability of a 25-basis-point cut, up from 96.2% the day before, CME’s FedWatch tool showed.
Gold, which recently surged to record highs as investors moved away from the dollar, slipped 0.1% in early trading to $3,863 per ounce. The dollar traded at 147.18 yen, up 0.1% from late U.S. levels, and at 7.1321 yuan offshore, also up 0.1%, ahead of next month’s meeting between Chinese President Xi Jinping and U.S. President Trump. Trump said soybean purchases would be a key discussion topic.
The euro was steady at $1.1733, while sterling remained at $1.3474. The Australian dollar rose 0.1% to $0.6617 after data showed household spending barely increased in August. The New Zealand dollar (kiwi) gained 0.2% to $0.5828, marking its fifth straight day of gains.
