The dollar index (DXY00) on Wednesday fell by -0.06% and posted a 1-week low. The shutdown of the US government on Wednesday weighed on the dollar. The dollar added to its losses on Wednesday on weakness in the US labor market, following the unexpected contraction of the September ADP employment change for a second consecutive month. The weak labor market news also boosted the chances of a Fed rate cut at the October 28-29 FOMC meeting to 100% in the swaps market, a negative factor for the dollar. The dollar recovered from its worst levels on Wednesday after the Sep ISM manufacturing index rose more than expected to a 7-month high.
The US Sep ADP employment change unexpectedly fell -32,000, weaker than expectations of a +51,000 increase and the largest decline in 2.5 years. Also, Aug ADP employment was revised lower to -3,000 from the previously reported +54,000.
