On September 29, 2025, the U.S. dollar weakened against major currencies like the euro and yen. This follows a strong rally last week driven by robust U.S. economic data.
Investors now focus on Friday’s nonfarm payrolls report for clues on Federal Reserve rate moves.
Strong Data Shifts Views
Recent U.S. reports on housing, durable goods, and GDP revisions exceeded expectations. Jobless claims also dropped sharply.
These figures reduced bets on Fed rate cuts, with markets now expecting 42 basis points of easing by December 2025 and 105 by 2026’s end.
Shutdown Risk
A possible U.S. government shutdown looms as funding expires at midnight on September 30. President Donald Trump will meet congressional leaders to avoid it.
A shutdown could delay the jobs report, adding uncertainty, said analyst Marc Chandler.
Currency Moves
The dollar fell 0.6% to 148.61 yen and the dollar index dropped 0.2% to 97.9. The euro rose 0.3% to $1.1731.
Sterling gained 0.3% to $1.3436, while the dollar slipped 0.1% to 0.7973 Swiss franc. The Australian dollar climbed 0.5% to $0.6580.
Market Outlook
Analysts expect a shutdown to briefly weaken the dollar, with a rebound after resolution. Other data, like job openings and manufacturing PMI, will also shape views.
Eurozone inflation, such as Spain’s 3.0% rate, is unlikely to shift policy.
Global Factors
Rising military spending due to the Ukraine conflict and Japan’s potential rate hikes influence markets. Australia’s central bank is expected to hold rates steady on September 30.
Why It Matters
The dollar’s path affects global trade and investment. A shutdown or weak jobs data could sway Fed policy, impacting currencies in 2025.
What’s Next
Investors await the jobs report and shutdown outcome. These will guide expectations for U.S. rates and dollar strength.
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