The dollar index edged lower on Thursday as investors remained concerned about the potential weakness in upcoming data, as progress in Washington helped end a government shutdown.
President Donald Trump signed a bill late Wednesday night to reopen the federal government.
While the agreement marks an important step toward normalizing operations, markets remain cautious as attention shifts to the backlog of economic data soon to be released, which could paint a softer picture of the labour market and overall demand.
The unease is rooted in this week’s weak ADP Employment Change Weekly report, which showed US private employers cut an average of 11,250 jobs per week through late October.
The findings reinforced worries that labour market momentum deteriorated. With the Fed already signalling greater sensitivity to job market risks, traders remain alert to any impact on monetary policy.
US Treasury yields remained relatively stable, with the 10-year yield below 4.10%. Markets could react to the possibility that upcoming catch-up data could strengthen the case for additional Fed easing. Expectations around the timing and depth of future rate cuts are likely to guide the next major move for both yields and the dollar.
