Dollar weakens for the fourth straight session as US shutdown hits markets

The dollar index extended its decline for a fourth straight session on Wednesday, slipping to 97.6, after the US federal government shut down for the first time since 2019, with no clarity on how long it may last.

The shutdown came after Democrats and Republicans failed to reach a stopgap funding agreement, as Democrats insisted any deal should include an extension of expiring Obamacare subsidies.

The impasse threatens to furlough an estimated 750,000 federal employees, at a daily cost of roughly $400 million in lost compensation, according to the Congressional Budget Office.

Key government services could also be suspended, including the release of the highly anticipated jobs report scheduled for Friday. With the official report likely delayed, traders are placing greater weight on the ADP employment data due later today.

Meanwhile, Tuesday’s JOLTS survey showed job openings holding steady at 7.2 million, broadly in line with forecasts and signaling stable labor demand.