The U.S. dollar climbed against the euro and yen on Wednesday as investors positioned for a wave of delayed economic data once the government formally reopens. The House of Representatives is expected to approve a stopgap funding bill to end the longest government shutdown in U.S. history, restarting key federal services and releasing major reports that have been frozen for weeks. Traders anticipate the data backlog will inject fresh volatility into currency markets as investors reassess the Federal Reserve’s path on interest rates. The dollar index, which measures the greenback against a basket of major currencies, rose 0.19 percent to 99.63, while the euro slipped to 1.1572. Analysts said the reopening will likely spark short-term swings as markets process new figures on employment and inflation that could shape the Fed’s December policy decision. Some expect the updated data to provide only partial clarity, given the economic disruptions caused by the shutdown.
Meanwhile, the Japanese yen slid to its weakest level since February, weighed down by concerns that Tokyo’s new government will delay monetary tightening. Prime Minister Sanae Takaichi signaled that her administration favors keeping rates low to support growth, a message that markets interpreted as potential political pressure on the Bank of Japan. The yen fell 0.5 percent to 154.92 per dollar, briefly touching 155.04 before stabilizing. Japanese Finance Minister Satsuki Katayama issued a warning against “one-sided and rapid movements” in the currency but stopped short of promising intervention. Analysts at Danske Bank said verbal signals may not be enough to reverse the yen’s slide, adding that direct intervention could become more likely if the currency weakens further. The situation underscores how policy divergence between the United States and Japan continues to drive foreign exchange dynamics heading into year-end.
In the United States, Federal Reserve Chair Jerome Powell has signaled that a December rate cut remains uncertain as officials weigh mixed signals from inflation and employment. Futures markets currently price in a 64 percent probability of a rate reduction, reflecting cautious optimism that easing could resume if incoming data confirm a broader slowdown. U.S. Treasury Secretary Scott Bessent said Americans should expect major policy announcements in coming days aimed at lowering prices on imported goods such as coffee and bananas, as the administration works to stabilize household costs after weeks of disruption. Elsewhere, the British pound weakened to 1.3093 and the Australian dollar gained slightly to 0.6535. In digital assets, bitcoin rose 1.5 percent to 104,186 dollars, supported by renewed risk appetite in global markets. Analysts said that as the U.S. prepares to reopen, investors are bracing for a week of heightened volatility across currencies, bonds, and digital assets alike.
