Insights 
VT 
Recent discussions have focused on the timing of the US government shutdown and its possible resolution. A Senate vote passed with a 60 to 40 majority, suggesting the prolonged shutdown may conclude soon, although challenges remain.
The US dollar has held strong due to a lack of significant economic data during the shutdown. With the shutdown ending, questions arise about when data flow might return to normal. It may take time for data, like inflation and labour market figures, to become reliable, as estimates replaced actual values, raising accuracy concerns.
Anticipations Of A Weaker US Dollar
Anticipations of a weaker US dollar stem from Donald Trump’s criticisms of the Federal Reserve and calls for lower interest rates. Key considerations include potential changes in leadership and court decisions affecting the Fed. However, Trump’s unpredictable social media activity makes precise predictions on EUR/USD movements challenging.
Looking back at past events, like the major US government shutdown of 2018-2019, we are reminded of how a lack of economic data can create a false sense of security for the US dollar. During that period, the absence of negative data reports temporarily propped up the dollar. This is a crucial lesson as we navigate the current market.
In the coming weeks, traders should be wary of potentially unreliable data streams, a situation we saw during that past shutdown. For instance, the initial non-farm payroll report for October 2025 was later revised down by a significant 60,000, showing how initial figures can be misleading. This suggests that option strategies which profit from increased volatility, such as straddles on EUR/USD, may be more prudent than taking a simple directional view.
Political Pressure And Currency Volatility
The political pressure on the Federal Reserve, a major theme during the Trump administration, also remains a key factor for the dollar. We see echoes of this today, with ongoing fiscal debates in Congress creating uncertainty around the Fed’s policy path into 2026. This political noise is contributing to rising implied volatility in EUR/USD options, which has climbed from a low of 5.8% in September 2025 to over 7.2% today.
Therefore, the main risk for the dollar is not necessarily a single bad data point, but the return of reliable, comprehensive economic reports that could paint a weaker picture than the market currently expects. The Bureau of Labor Statistics recently noted ongoing challenges in survey response rates, meaning the upcoming inflation and jobs data for November 2025 carry a higher-than-usual margin of error. Traders should consider hedging long-dollar positions or using derivatives to protect against a sudden downward correction in the currency.
