The U.S. dollar drifted lower on Thursday after President Donald Trump approved legislation to end the country’s record-breaking government shutdown, lifting market sentiment, while the British pound struggled to advance following lackluster U.K. growth figures.
By 03:50 ET (08:50 GMT), the Dollar Index — which measures the greenback against six major peers — slipped 0.2% to 99.150, hovering near a one-month low.
Safe-haven dollar softens as federal funding resumes
The dollar lost some of its defensive appeal after Trump signed the spending bill late Wednesday in the Oval Office, reopening government operations after the House of Representatives voted through the measure.
The shutdown — poised to enter its 43rd day before the deal was struck — had been the longest in U.S. history, disrupting numerous federal agencies, especially aviation safety and transport oversight. It also delayed the release of key economic indicators that help guide Federal Reserve decision-making.
With federal departments restarting, markets now expect a flood of postponed data, including the upcoming monthly employment report.
Analysts at ING noted: “The White House said October payrolls and CPI data are unlikely to be released, meaning volatility will take time to pick up.”
Pound struggles despite dollar weakness
Sterling saw little benefit from the softer dollar, with GBP/USD trading flat around 1.3133 after fresh figures showed a sluggish performance from the U.K. economy.
GDP expanded only 0.1% between July and September, down from 0.3% in the prior quarter. The monthly reading for September showed a 0.1% contraction, raising pressure on the Bank of England to return to rate cuts after its recent pause.
ING commented:
“This complicates the job of Chancellor Rachel Reeves a bit more ahead of the UK Budget, where she’ll try to reassure markets with fiscally prudent measures, whilst trying not to dampen growth excessively or stoke up inflation.”
EUR/USD added 0.2% to reach 1.1612 ahead of eurozone industrial production figures expected to rebound after a sharp drop last month.
ING analysts added:
“EUR/USD has been attempting a break above 1.160, and while we are bullish on the pair into year-end, we admit a decisive move higher may be a bit premature. Some soft U.S. data is needed before 1.170 becomes a realistic short-term target for EUR/USD. For now, we expect more range-bound trading.”
Yen nears levels that previously prompted intervention
USD/JPY held near 154.77 in Asia after briefly topping the 155 mark for the first time in nearly ten months. The yen also touched a fresh all-time low against the euro as sentiment toward the currency remained negative.
Japan has intervened at similar levels in past episodes, and traders are now watching to see whether Prime Minister Sanae Takaichi’s government considers stepping in again.
USD/CNY slipped 0.2% to 7.0966 after a firmer-than-expected midpoint fixing from the People’s Bank of China. Meanwhile, AUD/USD gained 0.6% to 0.6577 following stronger Australian employment data that tempered expectations of further Reserve Bank rate cuts.
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