Dollar Falls as Markets Digest Political Deadlock

The dollar fell against a basket of currencies as the U.S. government shut down after Senate lawmakers failed to reach a funding deal.

The direct economic impact is expected to be limited but markets will likely focus on potential delays to the publication of U.S. data, particularly Friday’s nonfarm payrolls report, and possible layoffs of public sector workers, Danske Bank analysts say in a note.

“While these factors might not significantly alter the macroeconomic outlook, they could, all else being equal, modestly increase the likelihood of the Federal Reserve considering a rate cut in October.”