{"id":31326,"date":"2025-09-29T08:30:17","date_gmt":"2025-09-29T08:30:17","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=31326"},"modified":"2025-09-29T08:30:17","modified_gmt":"2025-09-29T08:30:17","slug":"dollar-weakens-as-shutdown-risks-cloud-fed-outlook","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-ca\/analysis\/dollar-weakens-as-shutdown-risks-cloud-fed-outlook\/","title":{"rendered":"Dollar Weakens as Shutdown Risks Cloud Fed Outlook"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"559\" src=\"https:\/\/www.vtmarkets.com\/en-ca\/wp-content\/uploads\/sites\/13\/2026\/03\/usd1-1024x559.png\" alt=\"\" class=\"wp-image-16968\" \/><\/figure>\n\n\n\n<p><strong>Key Points<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Dollar index (USDX) slipped 0.2% to 97.941, pressured by shutdown concerns.<\/li>\n\n\n\n<li>White House meeting and Senate vote will decide if government funding extends past Tuesday.<\/li>\n\n\n\n<li>Trump escalated political pressure on the Fed with a cartoon depicting Powell\u2019s dismissal.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\" \/>\n\n\n\n<p>The dollar index (USDX) dropped 0.29% to 97.544 on Monday, extending its retreat as traders braced for a potential U.S. government shutdown. The White House is set to hold a meeting later today, ahead of a Senate vote expected to determine whether government funding continues beyond Tuesday.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">The Trump administration has raised the stakes in a showdown with US Senate Democrats over a looming partial government shutdown, threatening to permanently remove workers if funding runs out next Tuesday <a href=\"https:\/\/t.co\/oHPxNuLKts\">https:\/\/t.co\/oHPxNuLKts<\/a> <a href=\"https:\/\/t.co\/WhfwaFCUss\">pic.twitter.com\/WhfwaFCUss<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/twitter.com\/Reuters\/status\/1971376674278093008?ref_src=twsrc%5Etfw\">September 26, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>Analysts warned that a shutdown would not only stall upcoming economic data releases but also complicate the Federal Reserve\u2019s policy guidance.<\/p>\n\n\n\n<p>Political risk added to market jitters after President Donald Trump posted a cartoon on his Truth Social account showing him firing Fed Chair Jerome Powell.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">President Trump posts cartoon image depicting him firing Fed Chief Powell <a href=\"https:\/\/t.co\/IjVsI9cKt4\">https:\/\/t.co\/IjVsI9cKt4<\/a><\/p>&mdash; CNBC (@CNBC) <a href=\"https:\/\/twitter.com\/CNBC\/status\/1972049198368375083?ref_src=twsrc%5Etfw\">September 27, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>The post stoked concerns about central bank independence at a time when traders are already debating the pace and scale of rate cuts following last week\u2019s strong U.S. data.<\/p>\n\n\n\n<p>The USDX index, last seen at 97.941, has now fallen back towards its mid-September range, testing levels that leave it vulnerable to further losses should lawmakers fail to secure a funding extension.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Technical Analysis<\/h2>\n\n\n\n<p>The <strong>US Dollar Index (USDX)<\/strong> is currently at <strong>97.54<\/strong>, down <strong>0.29%<\/strong> on the day, resuming its downward trajectory after briefly testing higher ground last week. The broader picture remains weak, with the index still unable to break convincingly above the <strong>98.00\u201399.00 resistance zone<\/strong>, and well below the March peak of <strong>107.57<\/strong>.<\/p>\n\n\n\n<p>Since bottoming at <strong>95.82<\/strong> earlier this month, the USDX has attempted a rebound, but the move has lacked conviction.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/en-ca\/wp-content\/uploads\/sites\/13\/2026\/03\/WhatsApp-Image-2025-09-29-at-155935-1024x448.jpg\" alt=\"\" class=\"wp-image-31327\" \/><\/figure>\n\n\n\n<p>Price action continues to track below the <strong>30-day moving average<\/strong>, which is sloping downward, while the shorter-term 5- and 10-day averages show choppy sideways movement. This suggests the dollar is struggling to establish a trend, with sellers retaining the upper hand.<\/p>\n\n\n\n<p>The <strong>MACD indicator<\/strong> offers a mixed picture. While the MACD line has crossed above the signal line recently, hinting at short-term bullish momentum.<\/p>\n\n\n\n<p>The histogram shows declining strength, reflecting the lack of follow-through buying. This aligns with the failure to hold above the <strong>98.00 level<\/strong>, turning the recent bounce into a potential dead-cat rally.<\/p>\n\n\n\n<p>From here, the key levels to watch are <strong>97.00<\/strong> as immediate support, followed by the cycle low at <strong>95.82<\/strong>. On the upside, <strong>98.50\u201399.00<\/strong> remains the critical resistance band.<\/p>\n\n\n\n<p>A decisive break above that range could trigger a broader recovery, but as long as USDX stays capped, the bias remains tilted to the downside.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Cautious Forecast<\/h2>\n\n\n\n<p>The dollar is likely to remain under pressure in the short term as shutdown headlines dominate sentiment. A <a href=\"https:\/\/t.co\/5zGd6tqsIi\" target=\"_blank\" rel=\"noopener\" title=\"\">deal in Congress<\/a> could stabilise the index back towards 98, but failure to resolve the funding standoff risks accelerating declines towards 96.<\/p>\n\n\n\n<p>In parallel, continued political attacks on the Fed could dampen confidence in the central bank\u2019s independence, leaving the greenback more sensitive to upcoming inflation and labour data.<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/www.vtmarkets.com\/trade-now\/\" target=\"_blank\" rel=\"noopener\" title=\"\">Create your live VT Markets account<\/a> and <a href=\"https:\/\/myaccount.vtmarkets.com\/login?_gl=1*d96fp5*_gcl_au*Njc1MzM0NjY0LjE3NTEzNTM4MTc.*_ga*MjA5ODA0NDIzNC4xNzI3OTE1ODQ1*_ga_J26NL1ZVX7*czE3NTczOTYxNzckbzgzJGcwJHQxNzU3Mzk2MTc3JGo2MCRsMCRoMA..*_ga_6XQ8153GYW*czE3NTczODczODQkbzE4MyRnMCR0MTc1NzM4NzM4NCRqNjAkbDAkaDA.*_ga_BG6LYEHPX1*czE3NTczODczODQkbzEzMSRnMCR0MTc1NzM4NzM4NCRqNjAkbDAkaDA.*_ga_7CG6454YR5*czE3NTczODczODQkbzEzMSRnMCR0MTc1NzM4NzM4NCRqNjAkbDAkaDA.*_ga_J8BRGZSREX*czE3NTczODczODUkbzEzMSRnMCR0MTc1NzM4NzM4NSRqNjAkbDAkaDA.*_ga_69Z54R4H9N*czE3NTczODczODYkbzEzMSRnMCR0MTc1NzM4NzM4NiRqNjAkbDAkaDA.*_ga_CY2VCKFC3C*czE3NTczODczODYkbzEzMSRnMCR0MTc1NzM4NzM4NiRqNjAkbDAkaDA.*_ga_TXZ07R2C21*czE3NTczODczODYkbzEzMSRnMCR0MTc1NzM4NzM4NiRqNjAkbDAkaDA.*_ga_17TMGY9BBE*czE3NTczODczODgkbzEzMCRnMCR0MTc1NzM4NzM4OCRqNjAkbDAkaDA.*_ga_2QCC3S2748*czE3NTczODczODgkbzEyOSRnMCR0MTc1NzM4NzM4OCRqNjAkbDAkaDA.*_ga_MWDVVSEVL5*czE3NTczODczODgkbzEyOSRnMCR0MTc1NzM4NzM4OCRqNjAkbDAkaDA.*_ga_EJCVQDC7VT*czE3NTczODczODkkbzEyNSRnMCR0MTc1NzM4NzM4OSRqNjAkbDAkaDA.*_ga_XJ4037XKK6*czE3NTczODczOTEkbzEyNCRnMCR0MTc1NzM4NzM5MSRqNjAkbDAkaDA.*_ga_E7D2PCX624*czE3NTczODczOTEkbzEyMyRnMCR0MTc1NzM4NzM5MSRqNjAkbDAkaDA.\">sta<\/a><a href=\"https:\/\/myaccount.vtmarkets.com\/login?_gl=1*d96fp5*_gcl_au*Njc1MzM0NjY0LjE3NTEzNTM4MTc.*_ga*MjA5ODA0NDIzNC4xNzI3OTE1ODQ1*_ga_J26NL1ZVX7*czE3NTczOTYxNzckbzgzJGcwJHQxNzU3Mzk2MTc3JGo2MCRsMCRoMA..*_ga_6XQ8153GYW*czE3NTczODczODQkbzE4MyRnMCR0MTc1NzM4NzM4NCRqNjAkbDAkaDA.*_ga_BG6LYEHPX1*czE3NTczODczODQkbzEzMSRnMCR0MTc1NzM4NzM4NCRqNjAkbDAkaDA.*_ga_7CG6454YR5*czE3NTczODczODQkbzEzMSRnMCR0MTc1NzM4NzM4NCRqNjAkbDAkaDA.*_ga_J8BRGZSREX*czE3NTczODczODUkbzEzMSRnMCR0MTc1NzM4NzM4NSRqNjAkbDAkaDA.*_ga_69Z54R4H9N*czE3NTczODczODYkbzEzMSRnMCR0MTc1NzM4NzM4NiRqNjAkbDAkaDA.*_ga_CY2VCKFC3C*czE3NTczODczODYkbzEzMSRnMCR0MTc1NzM4NzM4NiRqNjAkbDAkaDA.*_ga_TXZ07R2C21*czE3NTczODczODYkbzEzMSRnMCR0MTc1NzM4NzM4NiRqNjAkbDAkaDA.*_ga_17TMGY9BBE*czE3NTczODczODgkbzEzMCRnMCR0MTc1NzM4NzM4OCRqNjAkbDAkaDA.*_ga_2QCC3S2748*czE3NTczODczODgkbzEyOSRnMCR0MTc1NzM4NzM4OCRqNjAkbDAkaDA.*_ga_MWDVVSEVL5*czE3NTczODczODgkbzEyOSRnMCR0MTc1NzM4NzM4OCRqNjAkbDAkaDA.*_ga_EJCVQDC7VT*czE3NTczODczODkkbzEyNSRnMCR0MTc1NzM4NzM4OSRqNjAkbDAkaDA.*_ga_XJ4037XKK6*czE3NTczODczOTEkbzEyNCRnMCR0MTc1NzM4NzM5MSRqNjAkbDAkaDA.*_ga_E7D2PCX624*czE3NTczODczOTEkbzEyMyRnMCR0MTc1NzM4NzM5MSRqNjAkbDAkaDA.\" target=\"_blank\" rel=\"noopener\" title=\"\">r<\/a><a href=\"https:\/\/myaccount.vtmarkets.com\/login?_gl=1*d96fp5*_gcl_au*Njc1MzM0NjY0LjE3NTEzNTM4MTc.*_ga*MjA5ODA0NDIzNC4xNzI3OTE1ODQ1*_ga_J26NL1ZVX7*czE3NTczOTYxNzckbzgzJGcwJHQxNzU3Mzk2MTc3JGo2MCRsMCRoMA..*_ga_6XQ8153GYW*czE3NTczODczODQkbzE4MyRnMCR0MTc1NzM4NzM4NCRqNjAkbDAkaDA.*_ga_BG6LYEHPX1*czE3NTczODczODQkbzEzMSRnMCR0MTc1NzM4NzM4NCRqNjAkbDAkaDA.*_ga_7CG6454YR5*czE3NTczODczODQkbzEzMSRnMCR0MTc1NzM4NzM4NCRqNjAkbDAkaDA.*_ga_J8BRGZSREX*czE3NTczODczODUkbzEzMSRnMCR0MTc1NzM4NzM4NSRqNjAkbDAkaDA.*_ga_69Z54R4H9N*czE3NTczODczODYkbzEzMSRnMCR0MTc1NzM4NzM4NiRqNjAkbDAkaDA.*_ga_CY2VCKFC3C*czE3NTczODczODYkbzEzMSRnMCR0MTc1NzM4NzM4NiRqNjAkbDAkaDA.*_ga_TXZ07R2C21*czE3NTczODczODYkbzEzMSRnMCR0MTc1NzM4NzM4NiRqNjAkbDAkaDA.*_ga_17TMGY9BBE*czE3NTczODczODgkbzEzMCRnMCR0MTc1NzM4NzM4OCRqNjAkbDAkaDA.*_ga_2QCC3S2748*czE3NTczODczODgkbzEyOSRnMCR0MTc1NzM4NzM4OCRqNjAkbDAkaDA.*_ga_MWDVVSEVL5*czE3NTczODczODgkbzEyOSRnMCR0MTc1NzM4NzM4OCRqNjAkbDAkaDA.*_ga_EJCVQDC7VT*czE3NTczODczODkkbzEyNSRnMCR0MTc1NzM4NzM4OSRqNjAkbDAkaDA.*_ga_XJ4037XKK6*czE3NTczODczOTEkbzEyNCRnMCR0MTc1NzM4NzM5MSRqNjAkbDAkaDA.*_ga_E7D2PCX624*czE3NTczODczOTEkbzEyMyRnMCR0MTc1NzM4NzM5MSRqNjAkbDAkaDA.\">t trading<\/a> now.<\/strong><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The dollar slipped on Monday as traders weighed the risk of a U.S. government shutdown and growing political pressure on the Federal Reserve. &#8211; vtmarkets.com<\/p>\n","protected":false},"author":64,"featured_media":16968,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[31],"tags":[9,11],"class_list":["post-31326","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-dollar","tag-indices"],"acf":{"acf_article_selection_author":""},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/31326","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/64"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=31326"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/31326\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16968"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=31326"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=31326"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=31326"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}