-The U.S. dollar weakened against the euro and yen on Tuesday on concerns about the deteriorating U.S. labor market after a report showed that private employers cut jobs last month.
ADP Research said on Tuesday that its preliminary estimates show that private employers shed an average of 11,250 jobs a week in the four weeks ending October 25.
It comes as the federal government moves closer to reopening, which will unleash a flood of economic data that may point to a slowing economy.
“When the government is closed, the news stream is non-existent. With the government going to reopen, I think we’re going to begin seeing more cracks,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.
The U.S. Senate approved a compromise on Monday that would end the longest government shutdown in U.S. history, breaking a weeks-long stalemate that has disrupted food benefits for millions, left hundreds of thousands of federal workers unpaid and snarled air traffic.
It next heads to the Republican-controlled House of Representatives, where Speaker Mike Johnson has said he expects to pass it on Wednesday and send it on to U.S. President Donald Trump to sign into law.
Goldman Sachs expects the Bureau of Labor Statistics to publish a new data schedule between November 13 and 17, assuming the government reopens later this week. The government may also publish its September employment report a few days after reopening, likely on Nov. 18 or 19, Goldman economist David Mericle said in a report.
The dollar has bounced since mid-September as traders price in fewer rate cuts on a more positive growth outlook for the U.S. economy. Many Federal Reserve officials are also wary of making further rate cuts on concerns about the inflation outlook.
But on Tuesday, the euro rose back above its declining trend line against the dollar that has held since September 17, Chandler noted. “The underlying sentiment toward the dollar still remains negative,” he said.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro,fell 0.24% to 99.39, with the euro up 0.29% at $1.159.
The euro is supported by the outlook for European Central Bank policy, with its key rate expected to stay unchanged through 2027, while the Fed is seen easing policy.
The market is pricing in 67% odds the Fed will cut rates in December.
Trading volumes were low on Tuesday with the U.S. bond market closed for the Veterans Day holiday.
The Japanese yen strengthened 0.06% against the greenback to 154.06 per dollar.
The British pound was flat on the day, after earlier dropping on data showing that Britain’s labor market cooled noticeably in the third quarter as the unemployment rate jumped and wage growth slowed.
In cryptocurrencies, bitcoin fell 2.28% to $103,198.
This article was generated from an automated news agency feed without modifications to text.
