Dollar Rebounds as Government Shutdown Creates UncertaintyOctober 3, 2025 DOLLAR REBOUNDS AFTER ADP SELLOFFThe dollar fell Wednesday after the ADP National Employment report showed private payrolls decreased by 32,000 in September, boosting Fed rate cut expectations. But the currency retraced that move Thursday as traders reassessed. "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," explained Kit Juckes, Societe Generale's chief currency strategist. The dollar index gained 0.17% to 97.89, with the greenback strengthening 0.13% to 147.24 against the yen after four consecutive days of losses. This rebound reflects safe-haven demand amid shutdown uncertainty rather than fundamental dollar strength. EURUSD: LOWER INTO 1.1700 TERRITORYThe EURO continues to trade lower into the 1.1700 territory after the dollar rallied due to tariff and government shutdown concerns. Price remains in a mixed bias as traders expect this could be a short pullback while others speculate selling pressure could increase. The euro fell 0.11% to $1.1716, reflecting uncertainty about the economic impact of the government shutdown and the data vacuum it creates. With the monthly jobs report delayed, traders are left guessing about the Fed's next moves. GBPUSD: DROPPED BELOW 1.3500The POUND also dropped against the dollar, trading well below the 1.3500 level into the 1.34300 point of interest. Traders see this as a short-term bearish run, expecting the bullish bias would return to the market. Sterling weakened 0.39% to $1.3424, caught in the broader dollar strength wave. The currency faces the dual challenge of domestic uncertainties and the safe-haven bid flowing into the greenback amid U.S. political chaos. GBPJPY: SUFFERED GREATEST DROPThe Pound-Yen suffered the greatest losses this week, trading well below the 198.00 level. Traders had expected a bullish move to occur after a break above 200.00, however the reverse seems to be the case. This dramatic failure of the bullish breakout scenario highlights how quickly sentiment can shift. The dollar's strength against the yen contributed to this cross-currency weakness for sterling. GOLD: MAJOR DROP TO 3840Gold also made a major drop well into the 3840 level, however price seems to be holding at this point with expectations of a bounce and higher rally if support can hold. Despite the sharp decline, gold's ability to find support suggests underlying safe-haven demand remains intact. The shutdown and economic uncertainty could reignite buying interest if the 3840 level proves resilient. BITCOIN: RALLIES ON SHUTDOWN TO $120KBitcoin rallied on the U.S. government shutdown, trading well into the $120K level of interest. Traders expect this could be the chance buyers have been expecting to break the resistance point. The cryptocurrency gained 1.65% to $119,524.02, benefiting from the perception that political dysfunction and fiscal concerns make alternative assets more attractive. The approach to $120K represents a critical test of Bitcoin's ability to reach new highs. GOVERNMENT SHUTDOWN CREATES DATA VOIDThe shutdown leaves a critical gap in government data, including the closely watched monthly jobs report for September that was due Friday. It's unclear whether the data will be released even if government reopens Thursday. "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. "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." FED CUT EXPECTATIONS REMAIN ELEVATEDDespite the dollar's rebound, traders see a 25-basis-point cut at the Fed's October meeting as almost certain, with 87% probability of an additional December cut according to CME's FedWatch Tool. The shutdown may actually increase easing pressure if economic data deterioration continues or if the political dysfunction damages business and consumer confidence. LOOKING AHEADCan the euro find support in the 1.1700 area, or will dollar strength push it lower? Will sterling's drop to 1.3430 prove temporary as buyers return? Can the GBPJPY recover from its failed breakout above 200? Gold's ability to hold 3840 support will be critical for determining whether the precious metal can resume its uptrend or faces further correction. Bitcoin's test of $120K resistance could determine whether the cryptocurrency enters a new leg higher or consolidates recent gains. The shutdown's resolution—or lack thereof—will likely dominate market sentiment in the coming days. Until government data resumes and political clarity emerges, expect continued volatility and headline-driven trading across all major currency pairs. For now, the dollar benefits from safe-haven flows despite underlying economic concerns, while risk assets like Bitcoin paradoxically rally on the same dysfunction that's supporting the greenback. Another signal just hit from this new tool. Mani just added it to the community and it's already performing. Fresh indicator. Fresh signals. Fresh opportunities. Get Riptide Access Regards, TradingStrategyGuides | 
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