Dollar slides for the second consecutive session

The dollar index slipped to around 98 on Monday, extending its decline for a second consecutive session as mounting fiscal uncertainty weighed on sentiment.

Parts of the federal government risk shutting down on Wednesday if Congress fails to approve a new funding bill before the fiscal year ends on Tuesday. President Donald Trump is set to meet with congressional leaders later today in a bid to avert a shutdown, but negotiations remain fraught, adding another layer of political risk for financial markets.

Investors are also turning their attention to a heavy slate of US economic data this week. The September nonfarm payrolls report on Friday will provide the most important signal on labor market health, but job openings, private payrolls, and the ISM manufacturing PMI due earlier in the week are expected to shape expectations ahead of that release.

Stronger-than-anticipated US data last week tempered speculation of deeper monetary easing, with markets now pricing in roughly 40 basis points of total Fed cuts by year-end, down from earlier expectations for more aggressive action.

The greenback weakened broadly across major peers, posting its steepest declines against the euro, sterling, and yen. Analysts noted that with US Treasury yields slipping and fiscal risks in focus, short-term momentum has turned against the dollar. However, any upside surprises in this week’s data could provide a floor, particularly if job growth remains resilient and inflation signals hold firm.