Dollar Falls as US Government Remains Shutdown

Economic Indicators - The dollar index (DXY00) fell by -0.12% as the US government shutdown entered its third day, raising concerns about potential negative impacts on GDP growth and the dollar [1] - The September ISM services index dropped -2.0 to a 4-month low of 50.0, which was weaker than the expected 51.7 [3] - The September S&P composite PMI was revised upward by +0.3 to 53.9 from the previously reported 53.6 [2] Federal Reserve Commentary - Chicago Fed President Austan Goolsbee warned against front-loading too many interest rate cuts, citing rising inflation and deteriorating job numbers [4] - Dallas Fed President Lorie Logan emphasized the need for caution regarding further rate cuts, noting that inflation is further from the Fed's target than maximum employment goals [4] - Markets are pricing in a 97% chance of a -25 basis point rate cut at the next FOMC meeting on October 28-29 [5] Currency Movements - The EUR/USD rose by +0.22% due to a weaker dollar and supportive comments from ECB Governing Council member Wunsch regarding current policy settings [6] - The euro is supported by central bank divergence, with the ECB seen as largely finished with its rate-cut cycle, while the Fed is expected to cut rates approximately two more times by the end of the year [7]