The pressure on the United States dollar is likely to persist in trading on Tuesday (October 1, 2025). This is due to the increasing risk of a government shutdown occurring on October 1.
The situation was confirmed by U.S. Vice President JD Vance following a meeting between President Donald Trump and key figures from both the Republican and Democratic parties, which failed to result in an agreement on the budget.
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This sentiment will continue to influence market movements today, alongside the release of economic data. Below is the economic data from Trading Central:
- German retail sales (year-on-year/August) at 13:00 WIB; forecast is 2.2% vs previous 1.9%
- German inflation (year-on-year/September) at 19:00 WIB; forecast is 2.3% vs previous 2.2%
- U.S. Job Openings (JOLTs) at 21:00 WIB; forecast is 7.1 million vs previous 7.18 million
- U.S. Consumer Sentiment (September) at 21:00 WIB; forecast is 95 vs previous 97.4
GOLD
Gold (XAUUSD) prices surged over $74 or 740 pips to reach $3,833 per troy ounce, and by midday, it increased further to a record $3,870 per troy ounce. Since Monday, Gold has rallied more than $110.
The allure of Gold as a safe haven has amplified amid the risks posed by the government shutdown. Meanwhile, the dollar continues to face pressure, fostering a positive sentiment for Gold, suggesting that the upward trend may continue.
OIL
Oil (CLS1) prices fell by $2, reaching $63.16 per barrel in early trading last week amid concerns of oversupply. This decline follows OPEC+’s plans to increase production again, alongside the resumption of oil exports from Iraqi Kurdistan via Turkey.
Morning data from China indicated that the manufacturing activity index for September stood at 49.8, remaining below the 50 mark that separates expansion from contraction. Ongoing contraction in the manufacturing sector could signal weak demand for oil from the world’s second-largest consumer, thereby increasing negative sentiment towards oil prices.
EURUSD
EURUSD rose by 249 points (24.9 pips) to 1.16997 in Monday’s trading. The ongoing pressure on the U.S. dollar is expected to continue impacting this currency pair.
If the German retail sales and inflation data exceed forecasts, as indicated earlier, it could positively influence EURUSD. Higher retail sales may signal strong consumer spending, which is beneficial for the economy. Conversely, rising inflation may prompt the European Central Bank (ECB) to be more cautious about lowering interest rates.
GBPUSD
GBPUSD climbed 263 points (26.3 pips) to 1.33987 in Monday’s trading, moving further away from the seven-week low reached the previous week.
The pressure faced by the U.S. dollar remains the primary driver for GBPUSD, which is expected to continue affecting trading during the European session.
USDJPY
USDJPY plummeted by 981 points (98.1 pips) to 148.514 in Monday’s trading, reflecting the significant pressure on the U.S. dollar due to the potential government shutdown.
In the event of a shutdown, hundreds of thousands of government employees would be furloughed. As a result, the release of economic data could be delayed, making it difficult for market participants to gauge the state of the U.S. economy.
Given the current state of the U.S. economy, particularly the weakening labor market, a shutdown could exacerbate the situation, potentially pushing USDJPY lower.
NASDAQ
The Nasdaq index rose to 24,810 in early trading last week. However, the increase in Nasdaq is limited due to the growing risk of a government shutdown.
As Nasdaq approaches its record high of 25,026, there is potential for profit-taking in the European trading session.
