Dollar Pauses as Data Delays Weigh Amid Partial Government Shutdown

The dollar index hovered around 97.4 on Wednesday, halting its recent rally as a partial U.S. government shutdown delayed the release of key economic data, keeping investors on the sidelines.

The latest job openings figures and the January employment report, both scheduled for release this week, were postponed, leaving markets without fresh signals on the health of the U.S. labor market. The data blackout added to uncertainty and reduced near-term trading momentum in currency markets.

President Donald Trump signed a $1.2 trillion funding bill to end the partial shutdown, although financing for the Department of Homeland Security remains unresolved, raising concerns about potential future disruptions.

The dollar had strengthened in recent sessions after Trump nominated Kevin Warsh as the next chair of the Federal Reserve, a pick widely viewed as less dovish than other candidates. At the same time, resilient U.S. manufacturing data helped temper expectations for rapid interest rate cuts.

Despite the recent rebound, markets continue to price in the possibility of two Federal Reserve rate cuts this year, with expectations centered on potential moves in June and October, depending on incoming inflation and labor market data once government reporting resumes.