The US dollar gained strength against both the Japanese yen and the Australian dollar on Tuesday. Investors are taking a more cautious stance ahead of decreased risk appetite and upcoming US economic data.
In the early hours of the Asian session, the yen fell to its weakest level since February, while the Australian dollar remained relatively stable.
In recent days, expectations that the US government shutdown will soon end have encouraged investors to turn to risky assets.With the US Senate approving a compromise that includes restoring funding to federal agencies, the government is expected to reopen soon.
This development has caused markets to reshape their expectations for an economic recovery and the Fed’s interest rate policy.BNP Paribas chief economist Isabelle Mateos y Lago stated that the economy is “remaining resilient in a moderate inflation environment,” and predicted that the Fed could make a 25 basis point interest rate cut in December.
The pound sterling fell 0.40% to $1.3126 following a weakening in the UK labor market.
The dollar, meanwhile, rose to 154.28 against the yen, reaching its strongest level since February. […] […] On the other hand, the Swiss franc continued its gains for the fourth consecutive day, as talks between the Trump administration and Switzerland to reduce trade tariffs resonated positively in the market. […]
