30/09/2025
As October begins, market attention will focus on whether the US government avoids a shutdown and how this impacts Fed decision-making. In the UK, BoE commentary and upcoming inflation data will be pivotal in shaping GBP sentiment, while fiscal concerns remain a headwind.
The US Dollar (USD) remains on the back foot as concerns over a potential US government shutdown intensify, with Vice President JD Vance signalling that the government is “headed to a shutdown” after Republicans and Democrats failed to reach a funding agreement before the Tuesday midnight deadline.
The US Dollar (USD) is retreating at the start of the week, pressured by the heightened risk of a US government shutdown, which US President Donald Trump is set to discuss with congressional leaders today.
The US Dollar’s two-day rally is consolidating, driven by upbeat US macroeconomic data, including revised Q2 GDP growth of 3.8% and lower Initial Jobless Claims. This strong data may lead the Federal Reserve (Fed) to be cautious about future interest rate cuts.
Major currency pairs are struggling to find a clear direction as markets await new catalysts, including German business sentiment and US housing data.
The Euro has softened against the US Dollar following weaker-than-expected German business climate data, while the Pound Sterling has also lost ground due to disappointing UK PMI figures and fiscal concerns.