The US dollar fell against most major currencies yesterday and continued its weakness today. Despite attempting to recover some of its losses following the US Supreme Court’s decision to review in January a case concerning Federal Reserve Board member Lisa Cook — allowing her to remain in her position temporarily — the greenback extended its losing streak for a fourth consecutive session.

With the US government entering shutdown yesterday, and the Supreme Court delaying its ruling on Cook’s case, concerns over Fed independence may temporarily take a back seat.

Analysts note that the bigger worry for investors may be the lack of economic data due to the shutdown, which makes it harder to form a clear assessment of US economic prospects and the Fed’s policy trajectory. However, market movements remain far from panic.

Disappointing ADP Report Draws Attention

The main driver behind the dollar’s weakness was not necessarily the government shutdown, but rather the suspension of Friday’s official jobs report, which shifted traders’ focus more heavily to the ADP survey for a snapshot of September’s labor market performance.

The report showed that the private sector lost 32,000 jobs instead of an expected gain of around 52,000, heightening concerns about a deeper slowdown in the labor market.

Although the ISM manufacturing PMI came in better than expected, the employment sub-index remained in contraction territory, while input prices slowed, providing further reasons for dollar traders to maintain short positions.

Impact on Fed Expectations

Market expectations for Federal Reserve policy were also affected. A 25-basis-point rate cut in October is now fully priced in, while another cut in December is seen as almost certain.

As for 2026, where expectations had previously pointed to two more quarter-point reductions, markets are now pricing in close to 70 basis points of additional cuts.

Gold prices rose slightly in European markets on Thursday, extending gains for the sixth consecutive session and trading near record highs, on course to surpass the $3,900 per ounce barrier for the first time in history, supported by the continued decline in US dollar levels in the foreign exchange market.

In addition, strong expectations remain that the Federal Reserve will cut interest rates twice before the end of this year. To reprice those expectations, markets await the release of more key data on the state of the US labor market, which the Fed relies heavily upon in shaping its monetary policy tools.

Price Overview

Gold prices today: gold rose by 0.25% to $3,874.83, from the opening level at $3,865.62, with a low of $3,852.94.

At Wednesday’s settlement, gold prices gained 0.2%, marking a fifth straight daily increase, and recorded an all-time high at $3,895.34 per ounce.

US Dollar

The dollar index fell on Thursday by 0.15%, extending losses for the sixth consecutive session and nearing its lowest level in several weeks, reflecting the continued decline in US currency levels against a basket of global peers.

This drop comes amid a series of weak US labor market data, which strongly reinforces expectations for two Fed rate cuts this year, alongside ongoing concerns over the government shutdown.

US Interest Rates

Data on Wednesday showed that US private companies unexpectedly lost jobs in September, marking a second consecutive monthly decline.

The Job Openings and Labor Turnover Survey (JOLTS) report on Tuesday indicated slight growth in openings during August, along with a slowdown in hiring, suggesting weakening labor market strength.

Traders increased their bets on the Federal Reserve cutting interest rates two more times this year.

Following the above data, and according to the CME FedWatch tool: market pricing for a 25 basis point Fed rate cut in October rose from 90% to 99%, while the probability of rates staying unchanged fell from 10% to 1%.

To further reprice these expectations, markets now await the release of more key US labor data, including weekly jobless claims later today, and Friday’s nonfarm payrolls report for September.

Gold Outlook

Matt Simpson, senior analyst at City Index, said: weak ADP employment data ahead of the nonfarm payrolls report revived bets on Fed rate cuts to weaken the US dollar. He added that gold also received a boost from the US government shutdown.

Goldman Sachs stated in a note: the upside risks to our gold price forecast of $4,000 per ounce by mid-2026, and $4,300 per ounce by December 2026, have increased further due to speculative positioning and the sharp surge in holdings of Western exchange-traded funds (ETFs).

SPDR Fund

Gold holdings with SPDR Gold Trust, the world’s largest gold-backed ETF, rose by 6.01 metric tons yesterday, marking a fourth consecutive daily increase. Total holdings climbed to 1,018.89 metric tons, the highest level since July 13, 2022.

The euro rose in European markets on Thursday against a basket of global currencies, resuming its gains versus the US dollar and moving higher toward its strongest level in nearly two weeks, supported by the continued decline in US currency levels in the foreign exchange market.

In addition, growing inflationary pressures once again on European Central Bank policymakers are sharply reducing the likelihood of further European rate cuts during the remainder of this year.

Price Overview

Euro exchange rate today: the euro rose against the dollar by 0.2% to $1.1754, from the opening level at $1.1730, with a low of $1.1724.

The euro ended Wednesday’s session down by less than 0.1% versus the dollar, its first loss in four days, after earlier touching its strongest level in nearly two weeks at $1.1779.

Apart from selling and profit-taking, the euro retreated after the Wall Street Journal reported that the United States will provide Ukraine with intelligence for long-range missile strikes on Russia’s energy infrastructure.

US Dollar

The dollar index fell by 0.1% on Thursday, extending losses for a fifth consecutive session and nearing its lowest level in several weeks, reflecting the continued decline in US currency levels against a basket of global peers.

This drop comes amid a string of weak labor market data in the United States, strongly reinforcing expectations for two Federal Reserve rate cuts this year, alongside ongoing concerns related to the government shutdown.

European Interest Rates

Data released Wednesday showed inflation in Europe rose in line with expectations in September, highlighting growing price pressures on ECB policymakers.

Following this data, money market pricing for the ECB to cut rates by 25 basis points in October is currently stable at less than 10%.

Traders have scaled back bets on further ECB monetary easing, signaling the end of this year’s rate-cutting cycle.

Sources: ECB policymakers believe no further rate cuts are needed to achieve the 2% inflation target, despite new economic projections pointing to lower rates over the next two years.

Sources: unless the eurozone suffers another major economic shock, borrowing costs are expected to remain at current levels for some time.

Traders have scaled back bets on further ECB monetary easing, signaling the end of this year’s rate-cutting cycle.

The Japanese yen declined in Asian markets on Thursday against a basket of major and minor currencies, retreating from a two-week high versus the US dollar and heading for its first loss in five days, as correction and profit-taking activity weighed on the currency.

This came alongside a rebound in the US dollar, after the Supreme Court allowed Lisa Cook to remain in her position until January, easing concerns over the independence of the Federal Reserve.

Bank of Japan officials have adopted a more hawkish stance in recent days, which has clearly increased expectations of a potential rate hike in Japan before the end of this year. To reassess these expectations, investors are awaiting further key data on developments in the world’s fourth-largest economy.

Price Overview

Yen exchange rate today: the US dollar rose against the yen by 0.2% to ¥147.32, from today’s opening level of ¥147.04, with a low of ¥146.94.

The yen ended Wednesday’s session up 0.5% versus the dollar, marking a fourth consecutive daily gain, as safe-haven demand persisted on the back of US government shutdown concerns.

US Dollar

The dollar index rose 0.1% on Thursday, recovering from a one-week low and set to post its first gain in five days, reflecting a rebound in US currency levels against a basket of global peers.

The US Supreme Court announced it will hear arguments in January on President Donald Trump’s attempt to remove Federal Reserve governor Lisa Cook, leaving her in her post temporarily.

Tony Sycamore, market analyst at IG in Sydney, said that market concerns over the independence of the Federal Reserve “will now ease over the next few months.”

Japanese Interest Rates

Wednesday’s Tankan survey showed improved sentiment among major Japanese manufacturers for the second straight quarter, with companies maintaining optimistic spending plans.

BOJ officials have turned more hawkish in recent days, including Asahi Noguchi, a former board member and proponent of quantitative easing.

Noguchi said on Monday that the need to tighten monetary policy is growing “more than ever.”

Deputy Governor Shinichi Uchida and Governor Kazuo Ueda are scheduled to deliver speeches on Thursday and Friday respectively.

Traders currently price in a 40% chance of a quarter-point rate hike in Japan on October 30, according to London Stock Exchange data.

To reprice these expectations, investors await further data on inflation, unemployment, and wages in Japan.