The US dollar weakened on Monday as investors awaited a series of key economic reports that could influence the Federal Reserve’s interest rate outlook, while political deadlock in Washington raised the risk of a government shutdown.
The dollar fell 0.4 percent to 148.94 yen, retreating after last week’s strong gains, while the euro and pound sterling both inched higher, according to news reports.
Traders are focused on whether Congress can pass a funding bill before the fiscal year ends Tuesday, as a shutdown could delay the release of critical economic indicators such as Friday’s nonfarm payrolls report.
Despite easing slightly, the dollar remains supported by reduced bets on steep Fed rate cuts, with markets now pricing in a smaller reduction by December.
