By Gregor Stuart Hunter SINGAPORE (Reuters) -The U.S. dollar regained its footing in early Asian trading on Thursday after the U.S. Supreme Court said it would hear arguments in January over President
Dollar rebounds, uncertainty reigns as US government stays shut
Impact of Government Shutdown on Currency Markets
By Karen Brettell
Market Reactions to Economic Data
LONDON (Reuters) -The dollar gained against the euro and yen on Thursday with the greenback's rebound against the Japanese currency coming after four consecutive days of losses, as traders weighed the impact of a U.S. government shutdown.
Federal Reserve Interest Rate Expectations
The shutdown leaves a gap in government data, including the closely watched monthly jobs report for September that was due to be released on Friday. It is not clear whether the data will be released if the government reopens on Thursday.
Global Currency Comparisons
“In the absence of a resolution to the shutdown, it just feels like this market's looking a bit fearful, at least from a currency perspective,” said Eric Theoret, FX strategist at Scotiabank in Toronto.
Focus on Japanese Yen
“If everyone's flying blind on the data front, then markets are going to be focused on the headline risk and the back and forth on comments out of Washington.”
Euro and Sterling Performance
The dollar fell on Wednesday after the ADP National Employment report showed private payrolls decreased by 32,000 in September, boosting expectations that the Federal Reserve will cut interest rates two more times this year.
Cryptocurrency Movements
But the currency retraced that move on Thursday.
"The sense is that the market was happy to react to yesterday’s figures but will not be comfortable taking the dollar too far on less reliable data," said Kit Juckes, Societe Generale's chief currency strategist.
Traders see a 25-basis-point cut at the Federal Reserve’s October meeting as almost certain and are pricing in an 87% probability of an additional cut in December, according to the CME Group’s FedWatch Tool.
The dollar index was last up 0.17% on the day at 97.89. The euro fell 0.11% to $1.1716.
Against the Japanese yen, the dollar strengthened 0.13% to 147.24.
Traders are watching this weekend’s election to lead Japan's ruling party for signs on how fiscal policy will influence the currency.
Sterling weakened 0.39% to $1.3424.
In cryptocurencies, bitcoin gained 1.65% to $119,524.02.
(Reporting by Karen Brettell, additional reporting by Joice Alves; Editing by Mark Potter, Gareth Jones and Emelia Sithole-Matarise)
