Singapore: The U.S. dollar remained largely stable on Monday as global markets prepared for the release of a long backlog of American economic data, following weeks of delay during the recent U.S. government shutdown. With more than forty days of missing indicators, investors are bracing for a flood of economic updates that could reshape expectations for Federal Reserve policy in the weeks ahead.
The dollar index edged modestly higher to 99.37 in early Asian trading, reflecting cautious optimism but limited conviction among traders. The euro eased slightly to $1.1607, while both the Australian and New Zealand dollars posted small declines. Despite the calm appearance, analysts emphasized that markets are entering a period of heightened sensitivity, where even modest data surprises could trigger sharp movements in currency markets.
Carol Kong, currency strategist at the Commonwealth Bank of Australia, said the global market had been operating in a “data vacuum” for more than a month. As she noted, “Investors are extremely eager for fresh information about the current state of the U.S. economy.” One of the most anticipated releases is the September non-farm payrolls report, due on Thursday, which will serve as the first solid indicator of U.S. labor-market momentum since the shutdown began.
The recent softness in U.S. economic activity has prompted investors to reduce their expectations for a December interest-rate cut. Market pricing now reflects just over a 40 percent probability of a 25-basis-point reduction down from more than 60 percent earlier this month. Under normal circumstances, falling expectations of rate cuts would support the dollar, but sentiment toward U.S. financial assets has weakened over the past week, complicating the currency’s trajectory.
Thierry Wizman, global FX and rates strategist at Macquarie Group, said the dollar’s subdued performance in November stems partly from traders unwinding long-held dollar positions before the anticipated volatility caused by the release of delayed U.S. data. He warned that the coming weeks could be more turbulent than usual as markets process the backlog of information at an accelerated pace.
Elsewhere in the currency market, the British pound slipped to around $1.3161, pressured by renewed unease over the UK government’s fiscal plans ahead of its upcoming budget presentation. The Japanese yen continued to weaken, hovering near 155 per dollar after Japan reported a 1.8 percent annualized contraction in third-quarter GDP. The economic shrinkage the nation’s first in six quarters has raised speculation about whether Japanese authorities might intervene to stabilize the currency.
For investors across Asia, including emerging markets such as India, the dollar’s steadiness carries mixed implications. A firm U.S. currency can make dollar-denominated debt more expensive and potentially increase the cost of imports priced in dollars. At the same time, clarity from upcoming U.S. data may help stabilize capital flows and reduce near-term market uncertainty.
With the world watching closely, the next several days of data releases are expected to set the tone not only for the U.S. economy but for global markets heading into the final stretch of the year.